Where Does Money Come From? | Ole Bjerg | TEDxCopenhagen
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- Опубліковано 7 тра 2024
- Where does money come from? How is money created? Can commercial banks create money by issuing new loans? Knowing that electronic money represents 95% of the total money supply, have we privatized the creation of money in our societies?
Ole Bjerg believes that we have handed a vital societal power -- money creation -- to the financial sectors, and that this leads to instability, inequalities and a concentration of power outside democratic institutions. Facing this gloomy situation, he highlights the solution: a sovereign money system.
Ole Bjerg is an Associate Professor in the Department of Management, Politics and Philosophy at Copenhagen Business School, and co-founder of Gode Penge, an initiative for the democratization of the monetary system.
Ole Bjerg is an Associate Professor in the Department of Management, Politics and Philosophy at Copenhagen Business School. After his book, Making Money - The Philosophy of Post-Credit Capitalism, Ole published Parallax of Growth - The Philosophy of Ecology and Economy. He also co-founded Gode Penge, an initiative for the democratization of the monetary system.
This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at ted.com/tedx
This is why I never had debt. It's a scam! They create money out of nothing and then I am paying for that with interest? I rent cheap, I live cheap, I buy only food and necessities. Minimalism is the answer. Don't spend money you don't have!
Jyri Väätäinen I’m with you. But the thing is no one truly owns anything and everything is borrowed so we shouldn’t have to pay for anything. Food is real value not a piece of man made paper.
Price is to high to always stay low and live cheap. Use good dept to get ahead
Sorry to tell you but the money that you earn are debt, the taxes that you pay are interest on the debt that governament took on your name....you think that you can escape that but you're not.
I tell you this in hope you'll keep learning how banks and government still rob you from your wealth. The scam doesn't end there...
@@miketyson8236 Life is a scam. Nothing is yours. Especially where 1% rule the rest... Thanks for commenting. Banks are scam too, eventually everything will collapse.
@@miketyson8236 exactly. Try as you might you cannot escape it in society. All you can do is to learn and avoid the traps that they set out for us
I studied money creation for a long while and I have learned to explain the money creation very simply.
When someone goes to a bank to borrow money the banks provides the individual with a promissory note. When the customer signs the promissory note the banks sees that note exactly as money. "An unconditional promise to pay is money". So the bank deposits this promissory note into a TRANSACTION ACCOUNT and from there the ENDOGENOUS FUNDS are produced to write the check for the loan. The endogenous money does not come from deposits. There is no fractional reserve lending. Presently there is 1.39 trillion exogenous dollars created by the government, and the banks create 12 trillion + of endogenous money. There is no multiplicity effect. What is wrong with this?
1) If a signed promissory note is exactly the same as money well...I could signed a promissory note and buy a new car, or a house. In fact everybody could do it.They dont need to pay it back because the promissory note is itself "money". Soon the entire economy will collapse because no one would want to work when they can simply issue promissory notes just like the commercial banks do.
2) Banks gets rights to a house/car/business when someone signs for a loan but they have done nothing to get the house/car/business. All they did was an accounting trick.
3) The media and schools are controlled by bankers, other wise this would be common knowledge.
4) Banks do not tell "borrowers" that they are providing the funds for the loan. In a proper contract full disclosure is required.
5) Most of our money is created by debt. it is a promise to pay. So we will never get out of debt. Most people wont have enough capital to start their own business and savings will be dismal.
6)The bankers control the housing market and will price homes out of the reach of most people.
7) When a promissory note is paid off, it loses value. Fulfillment voids the value of a promissory note. This causes the money supply to shrink. It means that we are going to be forever in debt if we are to have money.
se7ensnakes I still don’t fully understand, how come you said the bank provides a promissory note, do you mean the borrow just signs the promissory note? not received from the bank.
Who gives the authority to the banker to create national digital currency and where is the regulation?
where did u get the documents, i want some books about this, please tell me!!!!!!!
se7ensnakes Bingo. Nailed it.
@@MrTrollBeast; Signature, It is your signature that creates new money. The minute you sign the loan for anything, brand new deposit is created. ("every new loan is new deposit" Bank of England). No, the bank did not loan you their money or money from any of their customers, they're not allow to do that. Brand new money is created from your signature, from your valuable energy that you eventually you'll pay back but bank don't have to wait till you do, it's insured anyway, another slight of hand (scam).
Environmentalists need to understand how money works before they can address the environment. Banks can create ungodly amounts of money with a few keystrokes, but then people spend that money in the real world (e.g. electronics, cars, houses, etc...) and those things require resources and energy.
Interesting - I wonder if the companies exploiting the world’s natural resources are also hooked on paying debt as well?
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property"
- Thomas Jefferson
Nah, it is time to decentralize money. Money should belong to **sovereign individuals** rather than the state!
bitcoin
@@kellohey8624 Oof
@@kellohey8624 Bitcoin Is okay but gold is better
Abandon this fantasy. Property rights are recognized (and have meaning in first place) due to existence of states. States in return get to issue the legal tender. Only in a libertarian utopia like Somalia you will get to have your own money.
@@AdSd100 no, the state gets to tax the citizens. Money can and should belong to the people.
Brilliant young man...His observations are correct...They lay the ground for new ways of looking at things...But we still have a long, very long way to go.
Jack Jackson you’re soo right. Jack.
I like the idea of publicly owned banks with 100% of the profit from loans going to benefit the local community that uses the loans for spending and future production. A recycling affect if you will.
Also like the idea of completely separating money creation from investment and commercial banking. This is very much needed to stabilize an economy and limit boom/busts cycles.
Allow private banks to fail. And public banks to only do responsible investments with community benefit in mind.
But in the end it Will still take an usury from the borrower otherwise the bank can not survive without its usury from each loan it rent out
But the more publicly you do the society the more it becomes a communistic or a socialistic country
Nothing is 100% profit from loans will go to local communities there is also other parts including the banks that want its share too so not many of us know where the money goes to or who gets what
Debt Slavery to state bureaucrats? No thank you!
@@widehotep9257 “…there are only tradeoffs.” - Thomas Sowell
Good talk!
Interest = Usury: The borrower whose original loan consisted of principal only, must also pay an extra amount that the Banker specifies (interest). Therefore, the new money never equals the new debt added. The amounts needed to pay the interest on the original loan is not "created", and therefore does not exist! To conceal the fraud of lending nothing, Bankers charge interest, whereby borrowers (of nothing) agree to return more imaginary "credit" than they borrowed. Creating a system of perpetual compound interest owed to the bankers.
We must change the design of how money is created for our childrens sake.
Very few people know about this: birth certificate, strawman, legal vs law, maritime law back to the romans, vatican etc.
Respect !
Working Class not true at all. If that individual squanders the loan, the interest can be usury and representing nothing. If that individual takes the loan to create something of value, that interest is represented by an asset
I see that you have also watched that hour long cheaply animated movie about the banking system. Never thought I would meet another soul.
Working Class, you are on the right track, however you are confusing a stock(loan) with a flow(interest). When principle is repaid, debt is extinguished and so is credit(money). But when interest is paid, it remains intact, to be spent by employees of the bank as wages. It's the cost of the bank's score-keeping services. IMO, we need a dominant sector of public banks to set the pace for the private banking sector. And perhaps require all private banks to be non-profit or cooperatives. Or just turn all banks into narrow banks and have the govt issue all credit/money like the positive money folks advocate in Britain.
Richard Werner explains this well.
But Richard Werner thinks we should let this unfair system continue on. Werner thinks letting banks create money out of thin air is good for businesses! Everyone else realizes the system is immoral and unfair and should be abolished immediately.
@@widehotep9257 I think he added for productive lending only which increases gdp. He objects to creating money supply for non productive uses like speculative lending.
@@MrMoss786 You know what else greatly increased GDP and business productivity? Slavery. The evils of bank-created debt-money are only slightly better.
@@widehotep9257 if gdp isn't increased but money supply is increased, it results in inflation and the widening wealth gap between rich and poor. Obviously I meant morally means of increasing GDP.
@@MrMoss786 There are two parts to learning about money creation by banks: First is learning the money creation mechanics, which Werner understands. Second is understanding the moral consequences of bank money creation, which Werner hasn't considered.
Please meditate on this: When a borrower gets a loan from the bank, the bank only creates the principal amount, not the interest that is due. For this reason, it is mathematically impossible for all borrows to pay off their principal and interest. This creates an endless system of borrowing AND defaults that ruins families, especially poor ones. All this suffering happens while the rich banker gets richer and richer collecting interest for loaning something HE NEVER HAD TO BEGIN WITH!
Look at these numbers and you will see I speak the truth: US Total debt is presently about $85 trillion dollars (this includes all credit cards, home mortgages, business loans, government debt, etc.). But the total US money supply is only $15 trillion! It is 100% mathematically IMPOSSIBLE for all of us to get out of debt, which is why very few people ever do. The system is intentionally designed to keep us in endless, unpayable debt to bankers. It is impossible to repay, just like trying to fill a five gallon bucket with one gallon of water; there is never enough!
Switching to community-owned banking can't solve this problem. The only workable solution must contain these three ingredients: 1) forgive all outstanding debts, 2) ABOLISH the bank-created money system, and 3) re-introduce a DEBT FREE money system.
Great speech and presentation specially to the weaknesses of current banking system. One note on the suggested solution is that he proposed the solution to the payments not to credit extension. The main failure on banks side is the role played in credit extension not the payments.
well spoken speech. good start on beginning to understand the global monetary system. but speaker failed to realize that the central banks themselves are not run by the democratic governments, but are in truth private banks themselves which *claim* to be run by the government. in truth, all major central national banks are privately *owned* banks. and the laws have been intentionally masked to look like they are run by the governments tho. so in truth, private banks create 'money' out of thin air and sell us pieces of paper (or numbers in a database) and we work our sweat and labor for their pieces of paper or their numbers in their databases. hmm, it sounds like a system that needs a major overhaul to me.
search Hidden Secrets of Money episode 4 for detailed explanation of this. it's free on youtube. it is titled 'Biggest Hoax in the history of mankind'.
Shawn Kovac it's not true. For example the Swiss Nationalbank is not owned by a low number of private bodies. 55% is owned by state institutions (Cantons) and 45% is splitted between various private shareholders. However, contrary to a normal company shareholders have a very limited power of control because the number of voting power is limited to 100 shares per private body, regardless of how many more shares a private body may own. On top of that, there are other laws in place that give autonomous power to the central bank in decision making. And just for all the readers of this comment: The money system of today is designed to increase inequality and to shift money from working people to rich people. The main mechanisms are hereby the interest rates and the power of private banks to create money out of thin air!
Shawn Kovac he also failed to realise that electronic money is also borrowed from the central bank otherwise base rates would be useless.
The Bank of England is owned by the Treasury.
Shawn Kovac
Right on the mark.. he has no clue that central banks are privately owned...
In this video he refers to the Central banks as being private and goes on to referring to them as government when he talks about how it's a good system. The Fed et al, are ALL private banks, any Central bank is. They respond to requests for private currency (Federal Reserve Notes aka dollars in the U.S.) in the form of loans because few realize they're adding to the national debt.
That's quite a difficult subject to tackle, Because even if we apply the solution mentioned, ( creating accounts in the central bank ) This also can lead to inequality because the commercial banks will be forced to pay interest if they borrow money from central bank, so the interest rate paid by the borrower will increase because the general interest he'll be paying equals the interest of central bank plus the profit margin fixed by the commercial bank. Consequently, This will deepen the inequality between people who have money and people who don't.
That is completely wrong, sorry. First the central bank will decide if it wants to stimulate the economy or if it wants to cool it. Depending on that, it will lend money to the commercial banks against interest, a lot, little or none. The central bank could stop its QE program which costs 63 billion euros per month. Furthermore, the system being much more stable, the money which is not invested in saving accounts being 100 % safe, no more too big to fail problems, that banking regulations which are killing small banks and rendering the work of the big banks impossible, can be simplified extremely and will render all related work so much simpler that costs for banking will go down.
I dont think you got my idea. What you just said is basic. He mentionned the fact of creating accounts in the central banks. In my personal view, that'll just complicate the life of millions. Re-read my first comment.
No, it wouldn't complicate anything. It would actually just be an extension of the inter-bank clearing system that is already in place between banks. Only this clearing system is run by a private entity as it is today.
Excellent presentation condensing a very complex topic
The interesting thing is that the reason we have independent central banks is because we don't trust politicians to directly control the money supply and interest rates. Governments can screw things up too and have many times in the past. This is sort of like the debate between socialism and capitalism.
i dont understand why interest would work better if we all have accounts with the central bank. Commercial banks just charge us interest based on what the central bank rate is. So Central bank would also charge us interest anyways. can someone explain?
What if we take the solution even further? What if we democratize (a little bit more) the creation of money, for example, anyone can obtain a credit as easily as opening a facebook account?
In other words, the world of credit ( credit, loans, etc. ) is a SCAM!!!!!
It is not a scam, it is THEFT THEFT THEFT THEFT THEFT THEFT THEFT THEFT THEFT THEFT. Over and over and over again.
it is legalized (and glorified) EXTORTION
@@hynsum The money they lend for houses and cars is simply entered into an electronic account (printed out of thin air). THEY ARE NOT LENDING YOU THEIR MONEY. And yet, they take complete ownership of your deed or title. THIS IS THEFT.
True
They take interest on it, only bcoz they're giving you the chance to pay it slowly. ( They're leaving their money for a TIME PERIOD. they're charging you for that time, if you think that interest collecting is not fair, then don't take the loan and live minimalistic.) Problem is in you, not in them.
The proposal that the government of each country which print paper money should also offer a saving account to allow people to pay electronically seems good if we believe that our government will use that money in a more responsible way than commercial banks do. There is a possibility that some countries choose to waste the extra money either to military or to hide in private account like is the norm in dictatorial regimes.
Another option not mentioned is credit unions.
Good talk, but the speaker does not say: 1. what happens to electronic money when you pay the loan back; 2. that the banks also pay interests to clients for deposits on their bank accounts. If I really delve into n. 1 and 2, I'm not sure I totally agree with Ole Bjerg.
Can someone explain the roles of the World central banks and the IMF in money creation?
I think the de facto world currency is the US Dollar, right? So the money source is the US central bank and private US banks (again through the US central bank), right?? So does the world central bank or the IMF come into this?
just an awesome talk
Brilliant!
I consider Money is "Anti Debt Paper". Money just facilitates transferrence of debt
Great presentation, but I’m pretty sure his solution is exactly what the head researcher says the Central Banks will try to pull.
Dr. Richard Werner, the researcher that uncovered this system, says the Central Banks have been in emergency mode and are trying to suggest that this problem stems from the private banks, as a PR move/power grab.
I think what Dr. Richard Werner found problematic is the fact that Central Banks of most countries are not held accountable. They are independent entities from the government. I think Dr. Werner would have agreed with the presenter of this video if Central Banks are put under democratically elected governments.
Great talk - Very clear for an economist student from the UK :)
he's from Denmark
I still dont understand where money comes from? Can anyone enlighten me?
thin air.
Governments are in charge and set the terms of reference if Central banks. They have to work closely with the government to be able to perform their government given role.
I never knew that banks can create money i thought only central bank has right to do that but the truth is very very sad
Some key concepts were very wrongly explained and eventually gets boring as we progress. 8:25 , we have some people sleeping and some ready to fall asleep of boredom -_-
What is required first and foremast is a clear, concise definition for money. Only then can that definition be split into types.
A very important and unfortunately not mentioned presumption: central banks and the corresponding governments are democratic institutions that deal in the interest of the people and know how to manage economy. It might be the case in the Nordics, but far not in all countries in the world. And also the described money creation process through lending is orchestrated by central banks through monetary policy and is restrained through regulations.
this is where bitcoin has value
Great information
If banks went back to "traditional banking" i.e. lending depositer money, the gov could no longer "insure" deposits. Saving money would carry a risk like any investment, and you'd need to trust that bank's lending criteria. Less people would deposit their money in banks. In essence this would be a step back and history rarely back-pedals.
Also, banks overall would have much much less money to lend, their business would shrink very significantly. They will never allow this.
Interesting insight.
The Central Bank of Australia describes money as ''Pure Confidence!!''
JP Morgan described money as Gold. There's nothing else.
This doesn't in any way explain how money is created. Anyone can tell you that money is made by a bank, and that digital money is different to cash money.
Money is made in banks based on the bases of the estimated value of everything in that country. So gold, platinum, workers value, products, and so on. And then that gives the value of the money. That is how money is valued and it's created on this basis. Inflation happens as a result of too much lending, and not enough return on lending, and so the banks say we're not getting enough back, they then stop lending, till they start getting money back from people going bust or whatever, if enough people don't pay debts they collect where they can.
But in essence money is a battering system. People value a product and people give what they think it is worth. That is the top and bottom of it at the end of the day.
Me I would rather create a system that works to create enough for everyone and aims to make a sort of technological economy with a lot of automation in which people get what they need. I would much prefer this. But people have to be willing to set up this kind of economy. Where 3d printers print out the latest versions of hardware, software updates update automatically, and machines are used to produce basic crops. This way everyone gets their basic needs met. In which money or battering would not be needed. Basically would have to set up a system that worked for us, kind of like how a tree makes fruit and drops it. But with technology machines would collect the fruit, maintain the farms so on and so forth with less effort needed on humans part. We could then focus more on education and or creative hobbies and so still advance. But again people would have to be willing to create this kind of system.
TheaDragonSpirit Check out the documentary Princes of the Yen. It's about Japan's highly successful lending policy requiring all loans from major banks after ww2 to be for GDP transactions, increasing supply alongside with demand and preventing destructive speculation bubbles. This policy lasted only until 1980, sadly. But it resulted in a super-powered economy.
Also check out the MMT community who advocate for permanent 2-5% govt deficits and a federal job guarantee. Randall Wray, Stephanie Kelton, and Steve Keen are the intellectual leaders.
If we combine these two policies with a tax system that favors worker-owned coops, we could have something that looks like what you're describing where automation is a good thing.
"Money is made in banks based on the bases of the estimated value of everything in that country." That is what you think would make sense, but actually there is no such mechanism. Banks do not strictly create money, but they do create credit, based only on your creditworthiness i.e. the confidence that you will eventually return the credit they give you. But this credit is as good as money, and is usually called money. And they don't need to have the money to begin with, as long as they can satisfy their promise to settle accounts with whoever you transfer your credit to. If you make a transfer to an account at the same bank, obviously the bank needs no real money for that. If you transfer it to another bank in the banking system, then it is just a matter of settling accounts between banks. This is not usually a problem either, as someone will on average be doing the same in the opposite direction. If a bank manages to balance the transfers in the two directions then they can keep this going, no matter how much credit they create. Meanwhile they collect interest on it.
That's literally false. Look up bank of England's paper. Banks create money when someone asks for a loan. The interest they earn is the real money here since once debt is repaid it's cancel out.
Good talk
For those who are interested to understand the topic even further, you may look into the videos related to Professor Dr. Richard Wegner...
In you proposal, when the bank make a loan, at the end of the process he have an asset (the loan) and a liability (the deposit) and no central bank money. So the deposit is money created out of nothing (not really nothing because the loan is not nothing) in plus respect to the central bank money. Same situation as now and the last several century and the only possible.
Sovereign money is wishful thinking. Big banks would NEVER switch from being a money creator to a mere financial facilitator (which is what they are supposed to be). They'd rather bribe every single politician, and they do, to make sure no one even suggests this.
Why not just increase CRR as a solution, its the ratio of the printed money kept in banks to total money ( printed plus electronic), Currently it stands around 5 %. In effect if everyone withdraws all their money the bank fails.
12:58 At law, commercial banks are not deposit-taking/loan-granting institutions; neither are they intermediaries as said by Prof Richard Werner
He knows that but is proposing an alternative system.
Around the 7th minute, he mentions that "banks create money when it's not needed, and restrict the creation of new money in recessions when it's needed." He gives the umbrella shop analogy. However, the mistake there is that "new money" has no use in any scenario as opposed to umbrellas that have a use in the rain. Recessions are primarily a result of money creation in boom times - eventually that money supply expansion has to be given back.
Next mistake is re interest- the inequality created by different rates of interest is negligible. The 2 major causes of inequality are that 1) the new money isn't distributed equally, so the first recipients of the new money enjoy its benefits before it has caused prices to rise - and those are usually the most credit worthy individuals with the most assets.
2) New money causes prices of assets to rise, so if you own assets you benefit by them rising in price.
His third mistake is to think that private banks are creating money against the will of the central banks. Central banks control private banks creation of money by the reserve ratio that they require the commercial banks to hold. It benefits the elite, the central banks and the indebted governments, to have an ever expanding money supply.
His first conclusion is rubbish.... That the freedom to create fiat/paper currency allows banks to help the needy in society. Even if true, they haven't helped them in the past, they just help the asset rich, speculators and bankers.
From around the 12th minute I realised that this guy was clueless.
In the current system, commercial banks net off their daily transactions via their accounts with the central bank. So that's no different to private individuals having accounts with the central bank. It's a nonsense suggestion.
Finally, there's never been a debate between politicians about the fractional reserve system (i.e. private banks creating money), because most of them don't understand it, and those who do want to hide its damaging consequences from ordinary people.
Greedy bankers and corrupt system.. Worst is that they are buying debts without your knowledge and put the "costs" on you...
This started well and ended well, but I do not believe the central banks need to have the power to create money. There are local exchange systems that are designed to created Money (or a unit of account) at the time of the trade of a good or service. This electronic money that is created is free and is basically just a way to keep record of who owes and who has credit within the system of users. State or national money should be creat jobs to meet the needs of society. This money should not be borrow, but rather issued for the purpose to improve the conditions within society. The quantity of money in circulation can be controlled to stabilize it's value in many ways without causing systematic inequality. Whether it's through a consumption tax to slow the depletion of natural resources, an issuance of new money to slowly replace the old currency, so it becomes a use it or lose it type system, or by issuing many different types of money for different sectors in the economy that can only be used in those particular sectors. In this way, each sector can be monitored by the number of users, the resources needed to sustain the demands of the users, and either a user tax or a set time frame for which the currency issued will expire so the overall quantity of money doesn't in that sector doesn't lose its value. In any case, the creation of money should be free and calculated to facilitate trades between people, groups, and counties, which is the world point of money to begin with.
Earl Pierce This is the best comment I've seen under this video. Bravo. I've been thinking about a consumption tax recently as well. I think it's a win. And so is a square foot based property tax. Land value tax would help sustainable development. Heck, if I were in Congress I might even vote to replace income/payroll taxes for those earning less than like 50k-100k with across the board wealth taxes.
The Central Banks and Fed belongs to the banks. They are private entities too.
If centralize all population accounts in the Central Bank, you are creating a bigger monopoly of one bank controlling all population. I suggest you to see videos of professor Richard Werner to better understand what is the real problem of money creation and allocation and why it is almost impossible to get out of the money system establishment.
great speech man. Its really no wonder why there is so much inaquality in the world. leaving huge greedy corporations to control our money flow will always result in the poor getting poorer and the rich getting richer.
ali birnie r
The inequality part of this talk is where he lost me. It's as if he's implying that anyone should be able to borrow money regardless of their ability to pay it back. Like the system or not, it is dependent on the ability of the borrower to fulfill their obligation to pay back the promissary note. The financial crisis was a result of many banks making risky investments that involved assets and revenue streams that were supplied by people who were not fulfilling their obligation to pay the promissary notes.
The 'money' he refers to, is credit. Money is what is used to repay the credit. Money and credit are distinctly different.
allocation of created money is decisive , credit guidance it must go into gdp related investments that create new goods and services, which is not inflationary. consumer credits and credits for financial transactions are. See Richard Werner, Steve Keen ...
Heres my reiteration~Money is numbers. Look at your paycheck and bank account. Banks are the originators of the quantity and allocation of the numbers that make up our money supply. The numbers that float about in the form of tokens (coins and cash) and digital blips (electronic money) have there source or beginning in Banks. Banks control the Originating Tap of Numbers which flow through the Economy. By Capturing this particular Function of the Economy~ the Money Issuance Power or Credit Creation Power through this Banks can direct the whole economy. Allocating where the money shall go is similar to steering the economic ships course. Until people wise up and unmask this rigged numbers game at the base of what 'appears' the rational operation of economy, until that point were captives of a game which allocates wealth/power in crazy ways hence the mad men ruling the planet. Wake up folks. Money is a useful tool and a terrible master.
Much of what he said is very good. But banks DO NOT have unlimited ability, or anything close to what is suggested above, to create derivative fiat credit, AND THAT IS BECAUSE banks have rigid liquidity requirements PLUS regular stress tests (more so since 2008) PLUS stringent lending criteria when any individual comes looking for his slice of the nice money pie ( translation - "IF YOU CAN'T PROVE YOU have ALREADY MADE IT IN LIFE, you can try elsewhere, thanks v much...") each of which, in total, IMPOSE strict limits on just how much lending upon lending upon lending they are allowed to do, without risking regulatory repercussions. In short, that's the problem with part of his argument above, otherwise it's a thumbs up from this viewer.
Also check out *_Zeitgeist Addendum - Money Creation and Fractional Reserve Banking_*
How do loans work:
1) You sign a promissory note. The banks uses the promissory note as a check and deposits a this check (promissory note) into a transaction account.
2) The bank, once it deposits the promissory note, now writes a check against that account and gives you the check.
3) The bank does not use any of its inventory to finance your house
4) The bank does not use any deposits or excess reserves. Fractional reserve lending was debunked decades ago.
5) The bank does not use any investor's money to finance your house
6) The bank does not use any money from the government to finance your house
7) The bank creates the money based on your signature of the promissory note. This is why in the promissory note the bank does not promise you anything. You, the signer, make all the promises. All the Bank does is write: "FOR VALUE RECEIVED" and then it has an amount you need to pay back. You assume that the bank gave you the money and that the value received is that money.
😎 As you pay back the "loan" the promissory note has less and less value until the promissory note is paid off and it no longer has any value.
9) If the signer dont pay back the loan the banks does a "CHARGE-OFF" and writes the delinquent cost off its balance sheet, to supposedly save taxes. The bank now is said to absorb the lost as an expense. Would like to see evidence of this.
10) There are few unanswered questions. What happened in the bank bailout. Did they get bailout and get to foreclose the homes? What happens when the promissory note is sold to wall street for investment purposes? What happens to the bank's general reserves if it goes negative? Why did the banks did the liars loans if it knows that this will cause a hardship to them? Why is this not explained in the on the mortgage signing? Why is this not taught in schools?
Problem is that only som private persons who have majority of stocks in centralbanks and other banks creat all money(paper money and credit electronic money).For ex private owned FED print dollar from nothing but don't pay revenues as tax,so tax government or others can't look or check FED books.
This is telling PART of the story. He is leaving out some very important things.
what?
Nice topics for Banker
The problem is not that we don't know what to do and what is right. The problem is that we don't know how to do it. We need advice how to take away the power of the financial oligarchy.
Great talk, well done!
Banks are not greedy! You should come to Australia.
It is a pity economists don’t know this stuff.
This guy just described what actually exists in the U.S. The part he doesn't seem to understand is that by loaning out deposits (regardless of where those deposits are held) money is created.
one thing is not clear if I buy a house for 200000 bank created a money though mortgage agreement. I owe 200000 to bank, Bank printed 200000 . I keep paying mortgage repayment say whole life total 400000 where is this additional 200000 accounted? where from 200000 extra come from?
Don't give up your day job just yet! Jeder hat das Recht, frei zu sprechen. Aber das, was hier als sog. Loesung angesprochen wurde, ist keine, da weder Geld noch die eigentliche Menge das Problem sind. Der Vortrag lässt leider andere Haupt-Motivationen in unser globalen Wirtschaft völlig ausser Acht, wie Gier und Macht! Geld allein ist nicht schlecht, was wir damit machen ist schlecht. Und ob wir viel oder wenig davon haben bestimmt immer noch nicht unsere Motivationen und demzufolge auch nicht unsere Wirtschaftsergebnisse, die wir damit erzielen.
One of his ideas of using a centralized currency is already in play using SDRs at the IMF. (which I imagine will be increased and diversified for greater public use over the next century.)
The other is by making money more democratic in a closed-loop system separated from money creation itself. This system would allow savers to earn interest by allowing banks to loan their money to other spenders.. but can separated from systemic risk by using a higher reserve reserve requirement. (Some advocate for a 100% bank reserve requirement as opposed to the 0 -10% requirement we have now.
People believe this is how banks actually work in the first place. . Might as well start acting like it.
The reality is that we are playing a game of shuffle the debt while we increase lending. It's a game of musical debt. .And someone is always guaranteed to lose every single day.
Earl Pierce tell me about these IMF SDRs...
A Full house in there
A bright guy
An interesting and powerful talk. He mentions Denmark UK and the eurozone and "comparable economies" - but in comparable economies he didn't mention the US economy, the biggest "comparable economy" of the lot. Just funny what is left out...
He states that the banks are not greedy. Oh no? Our system is based on greed, accumulation, consumption, control, and monopolization. We have a foundation of greed so what kind of outcomes are going to come from that? Instead we could build a different foundation, one based on equality and justice and restoring the planet. This system we have makes absolutely no sense, for all the reasons he mentioned and an even bigger one - it destroys our habitat! It's totally arbitrary and degrades us. We need other systems to choose from. Having only one means we live in tyranny not freedom, not even decency, as greed-based money is the reason we're all mentally insane (accepting wars, GMO's, fluoridated water, homelessness, etc as normal shows that we are) We are advanced enough now to have a system that eliminates the banks entirely and a money system that is designed to motivate our highest characteristics. Not greed for crying out loud! We don't need money like this. We can create a whole new foundation for an exchange system.
Everyone in the comment section suddenly experts LOL..
Great talk good perspective it's hard for people to understand and accept they are being scammed their whole world comes down..
Right
Elephant in the room. Don't look above your head.
comments section is always right😂🤣😅 we have couch potatoe coaches, bankers, lawyers, doctors, astronauts, scientists, economists, you name it 😂🤣😅.
This lecture has some good points, but I think he overlooks that the central banks ALSO create money out of thin air. They usually give large sums of money to the government in exchange for Government bonds. But the central government doesn't even give printed money in exchange for this: they too use electronic digits. There isn't much distinction between central banks and private banks; in a sense, both are private entities, and both create money from thin air. The gold standard is long gone, at the least for now.
Is the Federal Reserve sustainable?
1996-2008: GDP ↑45%, Monetary Base ↑46%
2008-2020: GDP ↑32%, Monetary Base ↑600%
Prior to 2008, the Monetary Base and the GDP were 98% correlated reflecting the reciprocal relationship of money and economic expansion.
Can the current rate of monetary expansion without corresponding GDP growth continue without consequence?
*Bloomberg sued The Federal Reserve in 2011 and uncovered a $7.7T secret bank bailout not represented here.
Amazing explanation, cryptocurrency will be our rescue...Banks are fighting for survival, let the revolution continue
Cryptos are speculative and wont take over anytime soon.
Its so manipulated
It was originally designed as an asset class that would literally moon compared to property or shares.
The wealthy
will buy them all out and there is no way of getting more
I own cryptos too.
Cryptos is hedge against inflation but you are still going to pay taxes in your local currency,dude.
A few thing missing from this talk.
First thing
The creation of money as described is only possible because of laws. The question then becomes how are laws created? Or more importantly how are laws inforced? The bigger picture answer to that is via aggregate faith. Provided a large part of a population have faith in the "law" then laws will be inforcable. The next question could be how do you get a large part of a population to have faith in laws. By telling them a story about how good it will be for them.
But its only a story. It may not be real. But as long as a large part of a population do believe it is or even is potentially good for them the story becomes acceptable. Faith in a human created story is what laws are and so what money is.
Second thing
As the presented solution to the issue of private banks controlling the creation of money would require a change in "laws" and laws are just faith, that could possibly be being controlled by vested interests telling a story as being good, then in the bigger picture how is that difference from what current exists.
Not that I'm suggesting that what we currently have is "good"
If the objective is to reduce inequalities perhaps a bigger idea could be the complete elimation of money, battering and trade.
If you think that cant be done consider they are all human created stories, that can be changed.
"Interest is tax" but you need to understand how. Yes, the interest is applicable to the person who takes money from bank, but this tax is beared by everyone else too. how? the inflation created by the creation of money is the invisible tax. Now, also understand that say your country has fractional reserve limit of 10%, so $1000 deposited, $900 can be lent. but we didnt just create $900, now even that money is deposited somewhere, pottentially allowing to lend again $810, and this keeps on going. Also banks give loan to each other to maintain fractional reserve, inherently that creates an unprecedented creation of new money, completely destroying economy with inflation. Why in US, a single parent working was able to live an american dream and now the same is not possible with two parents earning. This story is repeated in the whole world.
"Why in US, a single parent working was able to live an american dream and now the same is not possible with two parents earning. This story is repeated in the whole world."
That can be explained by supply and demand. When you increase the supply of labor, wages go down. Since it was traditional that men were the breadwinners in the past, most companies were limited to hiring mostly men, but with the advent of technology, more and more women can work, thus enlarging the pool of labor, thus lowering wages. There is no problem with an increase in labor as long as there are enough jobs that people are willing to do, but what happens when there aren't? Stagnant or lowering wages.
I think that money only matters if it’s not just made out of thin air. It has to be earned. I’m not an expert in this but my basic idea is that money only matters to get necessities like food. To a point not even gold is worth anything because it’s a luxury and in a basic world, gold would do nothing for one’s survival. That’s why I think people should only earn money if they provide something very important to other people. And if they just don’t want to make a service for others, then they’d have to provide everything for themselves(they’d have to build their own house with their bare hands and they’d have to farm or hunt to eat) that’s why I think lobbyists and any political person doesn’t deserve to earn so much money. They do important stuff but in most matters, people don’t need government. They should earn a little over the middle class. I’m not hood at expressing my ideas but if you can figure out what I’m trying to sag here... good for you!
What he is talking about is currency not money, money i.e. gold or silver tends to hold its value, currency does not hence we have inflation.
太天真了, 好像商业银行不被政府问责一样.
政府不是他們的老大，中央銀行才是。而各國的中央銀行又是被BlS控制。BIS的大老板又是誰呢？那才是關鍵問題。
The fed is not part of gvt... that's why we have a 20 trillion-dollar debt
2:55 to 3:37 whaaaaaat?
I feel like he’s a little bit off the topic.
Let me try to explain what money is.
It’s a measurement of wealth and medium of exchange.
It’s created because there’s an undeniable demand for it. If there’s not money, we’d have to use barter system in which people exchange goods for goods, which is very inconvenient and difficult. For example: a car manufacturer has to carry his cars to buy eggs from a farmer if the farmer want his cars. You see the point?
Just like water has three states : solid, liquid and gas. Money is state of every purchasable stuff and services.Who made it the state of everything? the government. Why? because people demand it. As i mentioned before it’s representation of wealth which is egg, bread and cars...etc. The trick is the total amount of money in the economy must match with the total amount of wealth in the economy as closely as possible for the economy to work efficiently. If there’s mismatch, inflation and deflation will occur. The economy will begin to suffer.
Biggest problem is giving PRIVATE COMMERCIAL banks to create money out of thin air. This is what needs to STOP.
Let's create electronically, free of debt money for everyone. That much as someone need. Central bank could muliplies bank reserves in his main computer. Then commercial banks could add new money on customers account. Hyperinflation of electronic money is not the same phenomenon that occurs in the case of hyper-inflation resulting from the printing of banknotes. First of all, no state in the history of this world has yet experienced it. Does anyone want to be first? Full financed freedom for everyone is possible, since money started travelling with speed of light. (Fibreoptics).
Thums up
Paper money is just a print off of an amount keystroked to an account on the promise of you paying it back later. A promissory keystroke because instaed of you owning your created promissory infcat at law the bank owns all of the money they have ever created to your account and all that you deposit in to it too.
@13:40 He asks when a politician debates how money is created, And Ole says "never". Not quite Ole. Steve Baker MP presented this very debate in the House of Commons 14th November 2014. It was the first time in 170 years that such a debate took place. N.B. Steve Baker is the only austrian economist out of 650 members.
Maybe it's time for academia to stop dismissing austrian economics - as they do.
What's more Ole, you are implicitly advocating CBDCs . I think you're wrong.
When did all people accepted money so much that you can't get to a needle without money, as if everything is being owned by banks, absolutely everything. That seam very wrong.
Central banks control money, and the bank of international regulations in Basilea Switzerland controls the central banks.
Not quite ... Milton Freidman thought so to
@@isawaturtle In 2000 there were 7 countries without a Rothschild owned central bank. Afghanistan, Iraq Sudan, Libya, Cuba, N Korea, Iran.
In 2003: Sudan , Lybia, Cuba, N Korea, Iran.
In 2011: Cuba, N Korea, Iran
example: CBR (central bank of Russia) is a member of Rothschild’s BIS (Bank of International Settlements
Gabriel Tarditi Please stop.
If you want to believe in BS then keep it to yourself.
Buy bank stocks folks!!!
Hello
Is there anything such as TOO MUCH MONEY? I must have missed something here.
The solution proposed by the speaker would lead to the Sovietization of the monetary system. Consequently, the economy would go down the drain.
funny how this important video only has 5k views. wondering if it was slightly censored
I think it's probably because of apathy, denial and cognitive dissonance as well as engineered distractions by the bankster controlled media apparatus.
If only i would get a dollar for every time he says ‘money’, I would have my personal economy.
Banks don't lend money nor do the take deposits.
fair information, horrible conclusion. the money being digital vs paper is completely IRRELEVANT. the problem is not that banks can issue more digital money. they could print paper money, same thing. the problem is that we are using a fractional reserve system and this is how its built to work. the current money system is working as designed. the solution is a new money system
Definitely doesn't grow on trees my friend hehe
Tupac Shakur does, it “paper” well made of cotton paper or something, hate the plastic money UK has to have now
towards the end he said the people should have no say in technocratic issues that should only be discussed by bank CEOs at worst and technocrats at best? I found such a statement to be fascism. The people should be able to discuss every little aspect of their nations' money. Then after that autocratic statement he reiterates his supposed democratic virtues which he had just negated in the previous statement. Listen to him again really closely towards the end.
This cannot be true - Bankers are upstanding & smartly dressed members of society.
did you saw the guy sleeping at @8.24
Good talk but fails to correctly explain why the current money system creates inequality. Specifically, how banks *paying interest on deposits* (and paying huge bonuses) create inequality, since the largest deposits are of the rich, while the poor will have virtually no deposits and will receive virtually nothing out of the banking business model.
The interest banks collect on loans, mostly gets returned to society -- it also pays bank employees, their bonuses and dividends -- but the significant part of the interest is returned as interest to existing accounts, but *proportionately to their existing level*, thus, increasing inequality!
Instead, either all (or virtually all) interest should be distributed *equally to everybody* (including to those that do not have accounts at a bank), or banks should be deprived of their ability to create money, so that all seigniorage (which is also a tax on money) is returned to the state, which creates the money and shells it into circulation, at the price of its choice (or the central bank's)!
So most of the interest goes to depositor's? It must be large depositors bc I don't make squat! Lol any insight on that?
Wait, are you actually suggesting that all deposit accounts be paid back the same dollar amount of interest regardless of the balance of the deposit account? In addition to paying people interest on a deposit account that they don't even have? Did I read that correctly? Because if that's what you really want, then the inverse should also apply, and that is all interest charged on loans as a whole shall be distributed to everyone equally as well, including those who don't even have a loan through a bank. Equality in the form you are talking about works both ways.
Equality rests with the individual and their willingness, ability and desire to achieve it, NOT with a system that takes from those who earn more and gives to those that earn less. We have already seen what public run financial services looks like. (Fannie Mae and Freddie Mac, as well as the current student loan debacle). Government run finance industry, at least in the U.S. often involves lower credit standards which leads to increased default rates all while increases in prices that far outpace inflation (college tuition) due to easy access to credit. The Federal Student Loan program IS the next bubble forming, and when it bursts, it will affect the world economies just like the housing bubble did.
I'll take my chances with private banks over a government run banking system any day. Our government has already shown and proven what their influence can do to a financial system.
This speaker has an intellectual viewpoint on money and it's creation, it is over complicated and confusing to me. Value comes only from producers of value and money and it's perceived value comes only from consumers of that perceived value of the product. Consumers are the only fuel for the economy.
watch a documentary called "princes of the yen" on youtube. i've learned much more about the role of central banks and money creation watching this doc than any economic books or videos.