The Secret of Oz

[Fiat Currency]

Re: The Secret of Oz

May I differ, on two counts.

But of course - life would be dull if everybody agreed on everything without discussion - and for now, we still both have the right to free speech & our Internet connections work

1. As this movie, The Secret of Oz, shows, we haven't always had debt based money. We always (in any monetized economy) have debt, but it need only be the lending of money you have, not the creation of new money through the magic of double entry bookkeeping. So no, we don't always end up with it.

2. What's more, debt based money is a cancer that has plagued civilization for millenia. I'm for zero tolerance of the stuff. Once a little is allowed, it seems to expand until it consumes the entire economic and political structure.

First a couple of positioning statements. I said months ago here that people who want to start their "knowledge journey" on economics/fiat currency/central banking etc. should first read "The Creature from Jekyll Island" followed by "Web of Debt". This movie takes almost all its premises from Ellen's book. That's OK on many fronts, because I think the walk through history is good for the average American to begin their "awakening".

I'm sure you noted in the movie that 1873 figures prominently. I had said to Finster here that 1873 is the comparison I would use for our current crisis. Not just because of the events I cited - but also because this crisis (will in the end) be about "Who controls the issuance and quantity of money, and based on what?"

Now, when you say "we haven't always had debt based money" ...

A) I agree & I've posted about this & other "sound money" periods before

B) I think you mean "we" as in America circa 1873 & Greenback era

C) While "we" were not using debt-based money, "WE" the rest of the other 95% of the Globe were ... so "we" really were (just for humour)

D) "WE and we" have debt based money now - so the irony's a little lost on me

E) You know I support a form of sound money & banking based on only loaning out what you have, as evidenced in my "Well Said" post to Finster.

So, I think your main gist is that Government created money (debt free) & controlling the quantity is the answer to the problem, to the exclusion of gold & any other system - as you said "no" to #1 & #2.

I think this would be an acceptable system within a Country's borders, and that's where the argument breaks down for me. If you had little need to trade with other countries and were mostly self-sufficient then that would probably be good enough. Today, almost every country controls the issuance of their currency (debt). Even by taking away the usury component - you're still left with everybody controlling their own denominator at free will of the people. The video glossed over this very quickly/heavily at the end - saying that it would be better than how Gov't controls money now.

Gold based doesn't work. It fails two ways.

(1) The gold base (the quantity of gold in the vaults and in circulation) does not expand and shrink naturally in tune with the economy of human productivity. This leads to serious inflation when there's too much gold (as in Spain after they plundered the Aztec gold) and serious deflation (as in the U.S. in the 1930's) when the economy is starved for insufficient circulating money.

It doesn't have to expand or shrink, that can simply be a function of price. Silver and Gold have worked for hundreds of years. I don't recommend them as exclusive money - I recommend them for settlement of International Trade and for Global Savings Banks.

(2) As this Oz movie notes, gold money falls prey to the problem that the largest gold holders can manipulate the market, causing economy booms and busts, to their own ends and increased power. No monetary system which allows private powerful interests to gain an increasingly dominant position can remain healthy for the rest of us.

In the end, the people will realize that the banks were given their rights and charter by the people. Therefore, any gold they own will be put into your country's Global Savings Bank after you have your Financial Nuremberg trial.

A healthy money system must have two characteristics:

1. The quantity of money must be controlled by people we can (and fairly regularly do) vote out of office.
2. No other private interests must be allowed to gain sufficient power over the money supply that they can co-opt those elected people.

I struggle with both of those as hard & fast rules. You basically have those rights now - but haven't used them in the last 100 years or so.

I see it this way ...

Any country can have any currency they want within their borders. Since money is mostly bound by the countries backing them - it will naturally create trade imbalances & by definition currency imbalances. Another currency will be needed to solve this problem as our Global Economy becomes more & more interlinked. I favor PMs but it could really include a few other components.

Americans don't really know what it's like to have to buy another currency to buy gold, oil or other such things. You currently have a currency that is a token of an unpayable debt and you will lose your "Exorbitant Privilege" as the World's Reserve Currency. Sorry.

As your neighbor and largest trading partner - I take no solace in that - as we will suffer too.

[ThePythonicCow]

Re: The Secret of Oz

You wrote:

we always end up with some debt-based money

I replied to that writing:

As this movie, The Secret of Oz, shows, we haven't always had debt based money.

You replied, apparently puzzling over what I meant by "we" with:

Now, when you say "we haven't always had debt based money"
...
B) I think you mean "we" as in America circa 1873 & Greenback era

Uh - no, I didn't mean specifically and just that American example. I meant by "we" just exactly what I thought you meant by "we", which includes at least Western Civilization as described in several examples in this movie The Secret of Oz.

Did you mean something else by your use of "we" in your statement "we always end up with some debt-based money"? By "we" did you mean "Canadians" perhaps? If so, I missed that shift of focus.

[chr5648]

Re: The Secret of Oz

When you watch the documentary he starts off with the romans and progresses to england and the US goes through the civil war, and then a little bit of the early 20th century. The whole time he is complaining and mentioning how much central banks are immoral and parasitic he also talks about the 'evils' of gold. The thing that really caught my eye was he only mentioned 1913 once and the federal reserve once. At that point he skipped in the timeline from 1913 to the crisis in 2008 and the bailouts.

All the while trying to make comparisons to a children's book. He can talk all he wants about debt based money but, to make conclusions about todays monetary system without even going through the 1913- 2007 period is really fishy. The current problems are primarily from the decisions of 1913 and forward.

The policies he proposes are inflationary monetary economics. All you need to look at to see the failure of inflationary monetary economics is the gold price, its the only thing that has MAINTAINED value, while the .gov and cnbc pushes growth, while there has been no stability for the past 3 decades, all the while gold has maintained purchasing power.

This guy seems fishy to me, to completely ignoring the 1913-2007 regime and currency actions, and then lecturing to people of the present to submit to his pie in the sky ideas based on a children's book is ludacris.


PS. my first thought when he said the US congress should print their own money, was the picture of neocons like cheney and bush coming back and starting new wars/insurgencies/killing/blood and creating some more pseudo democracies. Disturbing thoughts. Their already warring with debt based money, why encourage it?

[ThePythonicCow]

Re: The Secret of Oz

The policies he proposes are inflationary monetary economics. All you need to look at to see the failure of inflationary monetary economics is the gold price, its the only thing that has MAINTAINED value, while the .gov and cnbc pushes growth, while there has been no stability for the past 3 decades, all the while gold has maintained purchasing power.

I don't think what he's proposing is what we've had the last 3 decades. We've had a debt based system, which went into Ponzi debt mode and has now apparently began to collapse.

What he's proposing sounds to me like Chartalism, which is not debt based.

Chartalism need not be inflationary; that depends on how well and honestly the government manages the money supply. But at least we can vote our government representatives out of office.

This guy seems fishy to me, to completely ignoring the 1913-2007 regime and currency actions,

Well, that's understandable, given Bill Still's choice to use the Wizard of Oz as his major example. He focused on the events prior to and related to that movie. This is not fishy in my view. It is an interesting and in my view successful way to present this information to a wider audience.

Whether or not it is a serious problem that he took this approach depends in good part on whether or not the more recent events since 1913 involving the Federal Reserve are really of a different character. If they are quite different, then this Wizard of Oz example is no longer relevant.

I found this video quite relevant to our current situation.

the picture of neocons like cheney and bush coming back and starting new wars

I think we've learned by now that it's not just one side or the other. Reagan, Bush the Father, Clinton, Bush the Son, and Obama have all pursued aggressively militaristic foreign policies.

It might be useful to ask why this is so. Perhaps some major corporations are making some serious money. Perhaps, fueled especially by the Ponzi scheme FIRE economics, an oligarchy of corporations in such areas as oil, finance, drugs, food, chemicals, military and intelligence have grown sufficiently powerful to dominate American foreign policy, regardless of who is in the Oval Office, or ensuring that whomever they "trust" is in the Oval Office.

[chr5648]

Re: The Secret of Oz

I don't think what he's proposing is what we've had the last 3 decades. We've had a debt based system, which went into Ponzi debt mode and has now apparently began to collapse.

What he's proposing sounds to me like Chartalism, which is not debt based.

Chartalism need not be inflationary; that depends on how well and honestly the government manages the money supply. But at least we can vote our government representatives out of office.

Sapiens comments section has a ton of information on chartalism, some interesting viewpoints there.

I think you may have made a grammatical error in putting government and honesty in the same sentence. Too bad the masses are too dumb to vote politicians out, all they politicos do is promise more crap, bread, and circuses to the people which may increase under the system proposed.

[Fiat Currency]

Re: The Secret of Oz

... Uh - no, I didn't mean specifically and just that American example. I meant by "we" just exactly what I thought you meant by "we", which includes at least Western Civilization as described in several examples in this movie The Secret of Oz.

Did you mean something else by your use of "we" in your statement "we always end up with some debt-based money"? By "we" did you mean "Canadians" perhaps? If so, I missed that shift of focus.

we=America, WE=the rest of the Globe, therefore no shift in focus.

Exorbitant Privilege=World's Reserve Currency status

My other points still stand. Perhaps we can try it this way my virtual friend ...

If all nations create their own money usury free and quantity self-determined, what do you propose will be the anchor for determining their relative intrinsic value for International Trade ?

This video gets an A+ for its historical references, but I give it an F for its final conclusions. Plus it feels a little bit like a commercial for Ellen Brown - some of her stuff which I like - but some things are different Globally now vs. then.

First mover advantage to the "no liability" "no risk" currency is still open. Perhaps iTulip.com should take a shot at it

[ThePythonicCow]

Re: The Secret of Oz

I think you may have made a grammatical error in putting government and honesty in the same sentence.

Yeah. I'll grant that's less believable than if I had claimed that Oz was a real historical kingdom.

[ThePythonicCow]

Re: The Secret of Oz

we=America, WE=the rest of the Globe, therefore no shift in focus.

I was not referring to your reply which had the capitalized WE.

I was referring to exactly the posts I quoted.

Never mind.

I think it is clear that you and I were not intended to have a useful discussion on this topic this evening.

May our next discussion be more fruitful.

[chr5648]

Re: The Secret of Oz

This video gets an A+ for its historical references, but I give it an F for its final conclusions.

1) In the movie he mentions that Jacob Johan Anckarström was a banker/money changer/etc. assasinated the king of sweden. I tried to find sources all over the net, whether he was a hired assassin or a banker. I could not find one, the only motives that I was able to find was that the king insulted/disrespected jacob. Maybe someone with better search skills can find the source

2) I mentioned in a previous post that the video ignored the 1913-2007 time period

[LargoWinch]

Re: The Secret of Oz

PS. my first thought when he said the US congress should print their own money, was the picture of neocons like cheney and bush coming back and starting new wars/insurgencies/killing/blood and creating some more pseudo democracies. Disturbing thoughts. Their already warring with debt based money, why encourage it?

But chr5648, isn't what we got anyway?

That is an important point the video is trying to explain: we now have the bad stuff (wars etc.) but paid with debt, which we must repay at interest instead of having "only" the bad stuff.


In other words, the current system (debt-based) does not prevent the government from overspending one bit, hence the argument of "oversight" by the bankers on government is completely ridiculous. Granted a debt-free money system does not also prevent government overspending, but at least the you do not have to repay bankers with interest for the privilege.

The greatest shortcoming of the human race is our inability to understand the exponential function.
- Albert A. Bartlett

[ThePythonicCow]

Re: The Secret of Oz

If all nations create their own money usury free and quantity self-determined, what do you propose will be the anchor for determining their relative intrinsic value for International Trade ?

Ok - that's a useful question.

I'd propose using the Forex markets to determine the relative value of sovereign currencies. Let them float.

But I will acknowledge that the question of how to organize the inter-national monetary system(s) is a difficult one.

Fundamentally, we either have sovereign national floating monetary systems, with some doing well, some hurting, or else we have a world monetary system that fixes or semi-fixes sovereign currencies to some global base (gold or currency basket or whatever.)

We might have half a clue on how to organize a floating sovereign currency (though you and I probably don't agree on which half clue is the right one.)

We humans are friggin' hopeless when it comes to arranging some global currency base.

[chr5648]

Re: The Secret of Oz

But chr5648, isn't what we got anyway?

That is an important point the video is trying to explain: we now have the bad stuff (wars etc.) but paid with debt, which we must repay at interest instead of having "only" the bad stuff.


In other words, the current system (debt-based) does not prevent the government from overspending one bit, hence the argument of "oversight" by the bankers on government is completely ridiculous. Granted a debt-free money system does not also prevent government overspending, but at least the you do not have to repay bankers with interest for the privilege.

I understand this, but with the proposed solutions they could hypothetically print into oblivion. whats to stop them? voters? hope and change? My point is that the printing and spending would get even worse and worse, further compounding current problems.

If you really look at it closely, the current system is no different than what is being proposed, we don't actually pay interest it continues to be added to the principle. Like a ponzi scheme, with no intention of ever paying back the principle. Which is abstractly similar to what is proposed in the video.

Are you assuming or is anyone is this thread assuming that the actual debt will ever be repaid, or that even a small amount will ever be repaid? Almost every metric and action of the .gov seems to signal no repayment.

[ThePythonicCow]

Re: The Secret of Oz

If you really look at it closely, the current system is no different than what is being proposed, we don't actually pay interest it continues to be added to the principle.

There are two crucial differences.

1. Who gets to game the money creation system, the bankers or the politicians?
   
   When we give the bankers a monopoly on creating "free money" ad nauseum , then an unelected oligarchy can (and will) pyramid fraud and power until society collapses.
   
   When we give our government that power, then we citizens retain greater ability to throw the bums out if taxes or inflation are too high (profligate spending will cause one or the other of them to rise.)
2. What is the default mechanism?
   
   When we give the bankers the money monopoly, then the default mechanisms are foreclosure and bankruptcy, after which the bankers own or collect exorbitant rents or taxes on most of the property and income streams worth mentioning. Everyone else risks debt peonage.
   
   When we give the government the money monopoly, then the currency, even the government may collapse, but there is a decent chance you will still own your shelter, clothing and tools, and still have claim to whatever income you can earn.

Look at it this way. If the bank forecloses on your home and car and denies credit to your employer causing you to be laid off, then you become homeless and despondent. If the government taxes or inflates your income stream to near worthlessness, you will likely vote the bastards out of office.

P.S. -- I guess that's one crucial difference, expressed multiple ways.

[Fiat Currency]

Re: The Secret of Oz

I understand this, but with the proposed solutions they could hypothetically print into oblivion ... if you really look at it closely, the current system is no different than what is being proposed ... or is anyone is this thread assuming that the actual debt will ever be repaid, or that even a small amount will ever be repaid? Almost every metric and action of the .gov seems to signal no repayment.

Yup. Zimbabwe and Iceland already defaulted. Next? Global Fiat Currencies on "The Road to the Final Four".

TPC - I'm not sure Forex will cut it without an anchor currency. Today there are only about six pairs of currencies that matter - and they are all anchored to the $USD in some way. It's the journey away from the $USD as a reserve currency that creates the need for #1. While the USA will try to inflate its way out - default or devaluation are most likely.

In the end, slowly depreciating the $USD against a #1 currency will be the best option for the USA. A managed reduction in standard of living until equilibrium is restored to an unmanageable debt load. Heck, with 41M people on food stamps already - something's going to give at some point.

[ThePythonicCow]

Re: The Secret of Oz

TPC - I'm not sure Forex will cut it without an anchor currency.

Why?

something's going to give at some point.

That's for sure.