Max Keiser and Steve Keen and the implications of what was said

[ThePythonicCow]

Re: Max Keiser and Steve Keen and the implications of what was said

Baring the macro arguments - I believe it is fradulent, maybe fraud covered in a gosomer of legality but fraud non the less. Please show me what a bank has put up as consideration for a loan contract,

The money is just chips, just a way of accounting for things such as income streams.

The gambling casino is not committing fraud when it opens another box of poker chips for which it paid only the cost of production (plastic discs are cheap enough.) The casino opens another such box whenever a rush of customers shows up or the old chips become worn from use.

It's not the money that matters here. Do not get distracted by the nicely colored chips. Money is but the inches on ruler, the degrees on the thermometer, by which we measure general purpose exchangeable economic capacity (GPEEC).

It is the GPEEC that matters.

Loans monetize future income streams. That is they exchange between present and future GPEEC. Banks trade in income streams, for a fee. They will trade some of the GPEEC of your future wages for present GPEEC to you. They will trade some of the GPEEC expected in a corporations future profits for present GPEEC (bonds.) They will trade a governments future tax revenue (GPEEC) streams for present GPEEC (muni's and t-bills.) The savings and investment departments of a bank trade the other way, accepting present GPEEC in exchange for future GPEEC.

When a bank loans you $100,000 at say 5% it does not create or destroy that $100,000. Rather it exchanges future GPEEC for present GPEEC. That future GPEEC has more risk than the present GPEEC; in return for that risk they gain a secondary income stream (more future GPEEC) of $5,000.

Future GPEEC streams have more risk than present GPEEC. Both are just some amount of GPEEC, but the future capacity has more risk than the present. A bird in hand is worth two in the bush.

The coins and cash, and their equivalent credits and debits in bank accounts, are just the poker chips by which we measure GPEEC. The bank is in the business of trading GPEEC across diverse timings. A classic phrase from the Savings & Loan debacle was that S&L's were in the business of borrowing short (your savings account), lending long (your mortgage.)

Would the Western Electric (or whomever it is now) money wire service be a fraud? They charge you a fee to relocate some GPEEC from your city to some other city. At the end of the day they take in the same money they pay out, just in a different city. It is not fraud for them to charge for this. They have the expense of the telegraph wire (or whatever they use nowadays). Similarly when the bank lends money it is not fraud. The bank has the expenses of administration and of the greater risk of future GPEEC as opposed to present GPEEC. Western Electric teleports GPEEC across space; banks across time.

Money is just a measure of GPEEC.

It would be fraud to counterfeit GPEEC from materials or representations of little value. But bank lending does not do that. It teleports GPEEC across time, for a (usually quite ample) fee compensating for its administrative expenses and for the risks involved in such GPEEC teleportations of losing some of its GPEEC. It would be fraud (which fraud is likely happening at present in considerable amount) for banks to fail to deduct from their balance sheet equity the GPEEC losses encountered from loan defaults as those losses occur.

[Diarmuid]

Re: Max Keiser and Steve Keen and the implications of what was said

The money is just chips, just a way of accounting for things such as income streams.


The gambling casino is not committing fraud when it opens another box of poker chips for which it paid only the cost of production (plastic discs are cheap enough.) The casino opens another such box whenever a rush of customers shows up or the old chips become worn from use.

It's not the money that matters here. Do not get distracted by the nicely colored chips. Money is but the inches on ruler, the degrees on the thermometer, by which we measure general purpose exchangeable economic capacity (GPEEC).

I agree broadly with you here TPC, in fact my own thoughts on this is that money is just a representation of an individuals labour, creativity and potential since nothing in thw world of economics is done without human input, minerals are not mined, factories do not run etc.. so I think, in simplistic terms no doubt, as a certain quantity of money as representative of hours of productive labour, i.e. money is the chip to represent time and labour. I think all things of an economic nature can be quantified in such a manner from food grown or collected, to the manufacture of goods to the provision of services, each commodity or service represents a persons or collection of peoples time and labour.

It is the GPEEC that matters.

Loans monetize future income streams. That is they exchange between present and future GPEEC. Banks trade in income streams, for a fee. They will trade some of the GPEEC of your future wages for present GPEEC to you. They will trade some of the GPEEC expected in a corporations future profits for present GPEEC (bonds.) They will trade a governments future tax revenue (GPEEC) streams for present GPEEC (muni's and t-bills.) The savings and investment departments of a bank trade the other way, accepting present GPEEC in exchange for future GPEEC.

Here is where I disagree somewhat - if as Steve Keen and others are right when they suggest that money creation is endogenous, and exogenous money only follows endogenous money creation to ensure reserve requirements, then most if not all money circulating in the system is debt i.e. some claim on future time and labour, in fact there is no or very little money in the system which represents present labour, I may be paid 20 euro today for an hours labour, what may seem to me to be present money, however the twenty euro I have been paid still represents the claim on someone elses time and labour, because they manifested the money by taking on a loan, albeit the chip now has become disconnected from the borrower.

Due to legal tender laws we are all forced to operate in this type of FIAT system where all money we recieve and spend is but a claim on future labour of someone somewhere.

When a bank loans you $100,000 at say 5% it does not create or destroy that $100,000. Rather it exchanges future GPEEC for present GPEEC. That future GPEEC has more risk than the present GPEEC; in return for that risk they gain a secondary income stream (more future GPEEC) of $5,000.Future GPEEC streams have more risk than present GPEEC. Both are just some amount of GPEEC, but the future capacity has more risk than the present. A bird in hand is worth two in the bush.

Here I disagree again - it is not exchanging present GPEEC for future GPEEC, it (bank) is in fact creating the chips only to represent your future GPEEC, which allows the borrower to feed it in to the economy to circulate and exchange for the future labour of others. This is part of the fradulent nature of the system in my view, because this is the only means to monetize labour, we are all forced to hand over a percentage of our time and productivity to the entity(ies) which provides this "service", it is of little wonder to me where this percentage of time and labour is increasing due to compounding that we see the level of wealth disparity in society today, as wealth pools in the hands of the few gaming the system. The argument that the banks are taking a risk is not borne out by experience, i.e. bailouts, they offer nothing of substantiative value at the begining of the loan process (consideration), and hence can not pay if the level of defaults reaches a certain level, they have a definition for it in economics, semantics to paper over the reality, "bank runs". No doubt banks provide a service in facilitating economy but the amount they claim and the fact we have no other choice as to how we exchange our value amounts to extortion.

It is getting late here so I will stop here, maybe we will talk more if you wish to further the discussion, in the mean time, this song is resonating with me I add for your entertainment ;).

[Jay]

Re: Max Keiser and Steve Keen and the implications of what was said

From "THE CREDIT RIVER DECISION"

So it was the Illuminati.

[Jay]

Re: Max Keiser and Steve Keen and the implications of what was said

indeed, maybe the answer to your question is congruent to the answer to the question posed in this thread.


http://www.itulip.com/forums/showthread.php?t=12050

I would answer the question with... Usury, in fact I think it may well be the answer to most of the why? questions posed on this forum, from geopolitical to social to environmental to financial.

I know, I just have this habit of asking questions when I should just make a statement and be done with it. I prefer creating conversation and so end up asking a question to stimulate thinking and to see who bites and to feast on what they have to offer. In some ways it's the easy way out, but I usually can see the other side's position and would rather flesh it out to see if it changes mine. I don't have all the correct answers and there are a lot of bright people here who know what they are talking about, so in general more questions than statements from me.

[ThePythonicCow]

Re: Max Keiser and Steve Keen and the implications of what was said

I agree broadly with you here TPC, in fact my own thoughts on this is that money is just a representation of an individuals labour, creativity and potential since nothing in this world is done without human input, minerals are not mined, factories do not run etc.. so I think, in simplistic terms no doubt, as a certain quantity of money as representative of hours of productive labour, i.e. money is the chip to represent time and labour. I think all things of an economic nature can be quantified in such a manner from food grown or collected, to the manufacture of goods to the provision of services, each commodity or service represents a persons or collection of peoples time and labour.

It is not just labor. Labor is only one of the essential elements of any modern economy. But capital equipment, land, buildings, legal framework, corporate structure, ideas, inventions, reputations and brand names, farmed and mined resources, capital markets, ... are also essential parts of any modern economy. General purpose exchangeable economic capacity (GPEEC) can be obtained for or used to purchase any of these, in any modern economy using a general purpose fiat currency.

Perhaps your personal labor just happens to be a prime source of your GPEEC income. Perhaps you are struggling with a proper way to understand the issue of how to "control the money supply." See my next comment below.

Here is where I disagree somewhat - if as Steve Keen and others are right when they suggest that money creation is endogenous, and exogenous money only follows endogenous money creation to ensure reserve requirements, then most if not all money circulating in the system is debt i.e. some claim on future time and labour, in fact there is no or very little money in the system which represents present labour, ...

A key issue is how to "control the money supply." Let us consider the various forms of monetary systems.

• In simple opportunistic barter with untrusted strangers, we don't have any GPEEC, so don't have to concern ourselves with how much we have ;).
  
• In long term barter based trading, the quantity of GPEEC is limited to and realized as items of specific utility; it is not entirely generalized in its form, but is "general enough" given the specific predictable trading opportunities that exist. This island wants spices and has trees. The other island wants lumber and has fertile soil to grow spices. A trader can make a living sailing back and forth between the two islands with lumber and spices. The Silk Road is such an example.
  
  Any more elaborate economic system than such a barter trading system will have a separate and distinct monetary system realized using a currency that is accepted as a medium of exchange. This is an agreed common medium of exchange for trade. Within nations, this is the coin of the realm, and its establishment as the currency of nations monetary system is one of the essential defining acts of any nation. The coin of the realm invariably becomes confused with that realms economic GPEEC. Every monetary system that man has adapted so far has had fatal flaws. Sooner or later all monetary systems we know of undergo great distress, causing much economic distress. When the money fails, people suffer.
  
• In a monetary system based on pure gold and silver coin the quantity of money in circulation is limited by the quantity of some rare minerals that are difficult to obtain. So long as both the level of economic activity (the amount of GPEEC) and the amount of such minerals available to circulate (the amount of money in circulation) both remain stable, this can provide for a solid monetary basis to the economy. In times of rapid expansion or contraction of either the level of economic activity or the amount of such minerals available to circulate (e.g. Spain raiding the Aztec gold in the 1500's), such a monetary system becomes unstable, leading to monetary and hence economic distress.
  
• A monetary system based on gold or silver certificates that are fully backed with metal, allowing no reserve lending, is just a more convenient form of the previous example, albeit a system quite likely to soon "evolve" into the form of the next example.
  
• A monetary system based on such certificates that are not fully backed, whether by reserve lending or by the more ancient mechanism of using lower grade metals in the coin is really an example of a fiat money system, discussed next below, with a particular solution to this problem of how to "control the money supply." In a degraded coin monetary system, the government or King or central bank decrees the metal content of coins, commonly allowing more coin of lower quality to circulate. In a gold or silver reserve currency, they decree the amount of actual metal backing the currency certificates, commonly allowing more certificates with lower reserve backing to circulate.
  
  At this point in the evolution of monetary systems we can see one essential cause of the weakness of these and all more sophisticated monetary systems. That cause is corruption. Corruption is always easier to perpetrate when the parties involved to a transaction do not fully understand the nature of their business. Transactions that are partially opaque by the very nature of their obtuseness always offer an advantage to the more corrupt or capable party. Monetary systems more evolved than simple bartering always have participants who do not fully understand their essential nature (e.g. -- this present discussion.) Also transactions frequently occur in such systems in which one or both participants do not fully understand the financial ramifications of that transaction. Corruption in monetary transactions, besides being relatively easy, is also relatively enticing, as it can easily obtain great quantities of GPEEC. I'd sooner rob a bank than a farm, because twenty dollar bills are infinitely easier to launder (convert to GPEEC) than Holstein cows. I'd even sooner defraud someone in a complex financial transaction than rob a bank, because I am less likely to get caught, and if I arrange my scheme and choose my victim well, likely to make much more money.
  
  Sophisticated (reserve, fiat or more subtle) monetary systems are essential to modern robust economies, but seemingly impossible to keep healthy and stable except when all the participants are honest and competent. Since it seems that populations that are 100% honest (never mind the competence test) are scarce (especially on a global scale, in this day of a global economy), we have a quandary. Anyhow ... on to the next monetary system.
  
• As promised above, we come now to the topic of fiat monetary systems. The essential qualities of fiat monetary systems are that (1) a particular currency serves as the legally mandated measure of GPEEC and (2) certain legally approved forms (e.g. dollar bills or bank checking account deposits) of that currency are legal representations of a specific amount of GPEEC.
  
  This provides an abstract system of money that is readily convertible to and from the real world goods, services and taxes (in general, GPEEC.)
  
  At this point we come to the second essential problem of monetary systems. Actually this problem was partially evident in the reserve gold certificate or devalued gold coin system discussed above, but now in full fiat monetary systems, this problem becomes fully apparent. The problem is how to "control the money supply." What we have in a fiat monetary system, to remind the reader, is a two layer system.
  
  1. One layer is that of paper currency and bank deposits. So far as the constraints of physical law apply, that layer is essentially infinitely elastic. It would be absurdly easy, if we all agreed to do so, to credit every bank account with a trillion dollars. Heck, make it a quadrillion. I'm sure some bankers from Zimbabwe would gladly assist with any administrative details. The unemployed programmers who got us through the Y2000 software problems can come to the rescue once again to resolve any problems with banking software that won't handle that many decimal places.
     
  2. The other layer is that of actual goods, services and taxes (including your and my labor.) The quantity of this in the abstract I call GPEEC. This is not arbitrarily elastic. It's quantity changes, but within constraints and largely outside our ability to manage. Here we must consider peak oil, crop shortages and whether one worker is more productive than another.
  
  
  The health of such a fiat monetary system, and hence of the underlying economic system, depends on maintaining a stable relation between these two layers. We desire to control the money supply to remain in constant proportion to the GPEEC supply. The same amount of currency should obtain the same amount of GPEEC one day as the next. Sadly, this seems impossible for any sufficiently long period of time. Our finest minds debate what such a stable relation even means. Enormous, changing, conflicting forces impede on this stability from many directions.
  
  Various schemes have been devised to control the money supply.
  
  One well known scheme of the recent past had the Federal Reserve controlling certain inter-bank and central bank short term lending rates, in an effort to control the amount and cost of money immediately available to banks. This sort of works, for a while, within a confined envelope of monetary and economic conditions, though with a persistent inflationary bias. By inflation I mean increasing ratio of money to GPEEC.
  
  In another scheme, on which I elaborated in a previous post above, the amount of money in circulation is more or less exactly the amount of outstanding debt. To those who abhor interest bearing debt (and there is much to abhor about such) this is an abomination. All money in circulation is the progeny of an interest bearing debt. I claim that is roughly what we have had in the U.S. for the last half century give or take.
  
  Such an arrangement can work for a while. So long as most debt is extended by a bank primarily for the purpose of extracting the associated income stream that repays the debt with fees and interest, and so long as some sort of severe shift doesn't change ambient economic conditions excessively during the period of most loans, then such a debt based throttle on money supply is quasi-stable for a while, though inherently inflationary. The debt grows exponentially with accumulated interest, so this arrangement requires an exponentially economy. Given the finite limits of the universe, no economy can grow exponentially forever. Fiat currencies have no such limits; just add more zeros ;).
  
  It may be that with sufficient discipline, proper regulation and the enforcement of debt defaults and bank fore-closures when specified constraints are exceeded, that one can sustain such a monetary system indefinitely. Such an arrangement will however usually blow up. I know of no historical example to the contrary.
  
  The particulars of the current blow up deserve comment. The banks grew tired of just collecting fees and interest on actual loans, and found ways to leverage up their profits by securitizing these loans, creating pure monetary instruments which could earn far more fees and interest in a variety of ways. For the big banks especially the fees and interest from these securities and their associated derivatives and swaps and tranching came to dominate their profits. They no longer cared whether the underlying mortgage was worth a farthing or not. They actually preferred mortgages from less credit worthy customers because those mortgages were easier to write with whatever terms favored their use as the raw sewage out of which mortgage backed securities were formed. They made all this "safe" through the use of a complex interlocking set of financial contracts, tying the economic fate of all the involved big banks (and many nations, companies and individuals) together. When I worked in computers, we castigated "security through obscurity." I suppose these banking arranges are an example of "safety through obscurity." That doesn't work either. The Mutually Assured Destruction (MAD) which I feared as a child, hiding from a hypothetical nuclear blast under my school desk, has arrived. I guess the good news is that it is an economic holocaust, not a nuclear one.
  
  This essential disconnect between the unlimited potential quantity of fiat currency and the finite value of economic GPEEC is the basis of the heated, infernal "deflation" vs "inflation" arguments. We debate how much more or less currency it will take to obtain a given amount in a specific form of GPEEC over time. This matters to almost all participants in the economy because almost all of us are long or short the currency, and most of us are both long and short, in separate arrangements. Only those who not engaged in or planning to engage in any transactions (such as planning to purchase food in the future!) either long or short the currency do not care whether we have inflation or deflation. The only such people I have known were on their death beds, with no sizable estate to pass to their heirs.

Due to legal tender laws we are all forced to operate in this type of FIAT system where all money we receive and spend is but a claim on future labour of someone somewhere.

In all but the most primitive economies, GPEEC always has a time element. Right now I am happily living off the GPEEC that I accumulated from past labors. I am most delighted that GPEEC has a durable time element.

So here I disagree - it is not exchanging present GPEEC for future GPEEC, it (bank) is in fact creating the chips only to represent your future GPEEC, which allows the borrower to feed it in to the economy to circulate and exchange for the future labour of others. This is part of the fraudulent nature of the system in my view, because this is the only means to monetize labour, we are all forced to hand over a percentage of our time and productivity to the entity(ies) which provides this "service".

I am not forced to go into debt, if that's what you mean. If I choose to participate in the modern economy, that means dealing in GPEEC. That's the life blood of any economy past the most primitive barter system with untrusted strangers.

The essential property of all economies advanced at least sufficiently to sustain regular trading is that there is a means to convert between past, present and future GPEEC. The problem, as elaborated at (too) great length above, is that we know of no long term stable means to accomplish this.

The argument that the banks are taking a risk is not born out by experience, i.e. bail-outs,

Nineteen or so of the largest banks did engage in massive fraud in my view with the bail-outs. This was a theft of trillions from the public coffers. The bail-out was the fraud, not the lending.

Hundreds of other banks have or will fail. They took on too much risk and will not survive. That might be stupid, but is not in and of itself fraudulent.

they [the banks] offer nothing of substantiative value at the beginning of the loan process (consideration), and hence can not pay if the level of defaults reaches a certain level,

They offer their future equity, to absorb the default, in the event that the borrowers offer of a future income stream to the bank defaults.

That's a fair exchange in my view.

No doubt banks provide a service in facilitating economy but the amount they claim and the fact we have no other choice as to how we exchange our value amounts to extortion.

Eh - we have other choices. We can barter. We can neither a borrower nor a lender be. I prefer not to barter in most cases because I prefer to receive GPEEC for my goods and services, for that has "general" utility, rather than specific use. I choose whether to borrow or lend, depending on my resources, opportunities and estimations of the future economic circumstances of myself and my surrounds.

[Diarmuid]

Re: Max Keiser and Steve Keen and the implications of what was said

It is not just labor. Labor is only one of the essential elements of any modern economy. But capital equipment, land, buildings, legal framework, corporate structure, ideas, inventions, reputations and brand names, farmed and mined resources, capital markets, ... are also essential parts of any modern economy. General purpose exchangeable economic capacity (GPEEC) can be obtained for or used to purchase any of these, in any modern economy using a general purpose fiat currency.

Labour may well have been a ill advised and poorly choosen word to describe the concept I was trying to convey. I was trying to say, because economy is a human construct, it can be expressed in its most basic terms, of lets say, "human endeavour" for lack of a better term. In so far as I may be a factory owner, a farmer, a banker, a lawyer, any business with items like capital equipment, land, buildings, legal framework, corporate structure, ideas, inventions, reputations and brand names, farmed and mined resources, capital markets, they all require or have required human input to become and function, for example I may own a mine with a no. of tons of gold in that mine but that mine is worthless without human input and realtionships to operate, from the man who invented the mining equipment, to the man who manufactured the equipment, to the lawyer who drew up the deed for the mine, to the distribution mechanism etc.., I am saying, I believe human endeavour (mental or physical or realtional) to be the most basic unit of economy and as such, think in these terms when expressing economic value, I think of money as no more then a representation of this fundamental unit of time and endeavour. As to why we all endeavour as we do, I do not think the notion of utils even comes close to explaining this, I do not just work to accumulate money to maximise my satisfaction, I believe the same for most people - but suffice to say this is more a question of outlook and perspective and is more a topic of meta-physics and spirtuality, a discussion I think goes beyond the scope of our current conversation, and so beyond this brief mention, will not include it as a topic in our discussions, but think it may well be fundamental to flawed notions in economics.

This is my way of defining things in my mind, it is no more or no less abstract, to my way of thinking, then say the foundational idea of utils in formal economics, the notion of satification derived from consuming, and hence relating to all aspects all of economics theory including capital movement etc.., which are essentially mechanisms or concepts derived to maximizing said utils. I find, having studied a limited amount of mico and macro economics, many of the formal terms, notions and concepts, seem contradictory and offer little mental leverage on trying to understand the concepts and flows and so formulate my own framework or derive my thoughts from the work of others, which may not be main stream, but offer more insight or understanding to my subjective world view, rightly or wrongly.

Perhaps your personal labor just happens to be a prime source of your GPEEC income. Perhaps you are struggling with a proper way to understand the issue of how to "control the money supply." See my next comment below.

As per above, I do not believe my view is just limited to one of just self perspective one, but hope it is relatively broader then this.

A key issue is how to "control the money supply." Let us consider the various forms of monetary systems.

• In simple opportunistic barter with untrusted strangers, we don't have any GPEEC, so don't have to concern ourselves with how much we have ;).
• In long term barter based trading, the quantity of GPEEC is limited to and realized as items of specific utility; it is not entirely generalized in its form, but is "general enough" given the specific predictable trading opportunities that exist. This island wants spices and has trees. The other island wants lumber and has fertile soil to grow spices. A trader can make a living sailing back and forth between the two islands with lumber and spices. The Silk Road is such an example.
  
  Any more elaborate economic system than such a barter trading system will have a separate and distinct monetary system realized using a currency that is accepted as a medium of exchange. This is an agreed common medium of exchange for trade. Within nations, this is the coin of the realm, and its establishment as the currency of nations monetary system is one of the essential defining acts of any nation. The coin of the realm invariably becomes confused with that realms economic GPEEC. Every monetary system that man has adapted so far has had fatal flaws. Sooner or later all monetary systems we know of undergo great distress, causing much economic distress. When the money fails, people suffer.
• In a monetary system based on pure gold and silver coin the quantity of money in circulation is limited by the quantity of some rare minerals that are difficult to obtain. So long as both the level of economic activity (the amount of GPEEC) and the amount of such minerals available to circulate (the amount of money in circulation) both remain stable, this can provide for a solid monetary basis to the economy. In times of rapid expansion or contraction of either the level of economic activity or the amount of such minerals available to circulate (e.g. Spain raiding the Aztec gold in the 1500's), such a monetary system becomes unstable, leading to monetary and hence economic distress.
• A monetary system based on gold or silver certificates that are fully backed with metal, allowing no reserve lending, is just a more convenient form of the previous example, albeit a system quite likely to soon "evolve" into the form of the next example.
• A monetary system based on such certificates that are not fully backed, whether by reserve lending or by the more ancient mechanism of using lower grade metals in the coin is really an example of a fiat money system, discussed next below, with a particular solution to this problem of how to "control the money supply." In a degraded coin monetary system, the government or King or central bank decrees the metal content of coins, commonly allowing more coin of lower quality to circulate. In a gold or silver reserve currency, they decree the amount of actual metal backing the currency certificates, commonly allowing more certificates with lower reserve backing to circulate.

• I do not think my framework as explained above, can not fit within the concepts you outlined above, if you believe so please eloborate

• At this point in the evolution of monetary systems we can see one essential cause of the weakness of these and all more sophisticated monetary systems. That cause is corruption. Corruption is always easier to perpetrate when the parties involved to a transaction do not fully understand the nature of their business. Transactions that are partially opaque by the very nature of their obtuseness always offer an advantage to the more corrupt or capable party. Monetary systems more evolved than simple bartering always have participants who do not fully understand their essential nature (e.g. -- this present discussion.) Also transactions frequently occur in such systems in which one or both participants do not fully understand the financial ramifications of that transaction. Corruption in monetary transactions, besides being relatively easy, is also relatively enticing, as it can easily obtain great quantities of GPEEC. I'd sooner rob a bank than a farm, because twenty dollar bills are infinitely easier to launder (convert to GPEEC) than Holstein cows. I'd even sooner defraud someone in a complex financial transaction than rob a bank, because I am less likely to get caught, and if I arrange my scheme and choose my victim well, likely to make much more money.

• Sophisticated (reserve, fiat or more subtle) monetary systems are essential to modern robust economies, but seemingly impossible to keep healthy and stable except when all the participants are honest and competent. Since it seems that populations that are 100% honest (never mind the competence test) are scarce (especially on a global scale, in this day of a global economy), we have a quandary. Anyhow ... on to the next monetary system.