Banking Mysticism

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MEJ's picture

I'm not an economist or a banker so it's been a long hard road trynig to understand the realities of banking and economics. There's a lot of hype and conspiracy paranoia, misinformation and confusion concerning these subjects. Thom has promoted Web of Debt and stuff like that, but Krugman doesn't seem to think it's a problem and attempts to demystify the matter. Robert Reich hasn't sounded any alarms about crazy banking practices either. Is Dr. Ecom still around?



DRC's picture
Read David Korten's AGENDA

Read David Korten's AGENDA FOR A NEW ECONOMY, or Why We Don't Need Wall St.  It is a great exposure of "Phantom Wealth" v. "the Real Economy," and the basic point is that money does not make money.  Korten also calls for development to be done from the bottom up rather than the top down.  He sees "indigenous" ownership of all development as essential and looks to a greater "artisanal" approach to deal with environmental and social realities.

While it is bad to pay a lot of interest on debts that do not pay off as investments, the answer to being in the warmonger, corporate crony bad debt hole is  not austerity.  It is investment in what does pay off as well as bringing the criminals to account rather than paying off their crimes for them. 

Think of it this way:  People who are facing financial disaster will buy a lottery ticket or go to the casino on an all or nothing roll of the dice.  If, they could use that stake or even borrow more to invest in a sure thing, it would be much better.  As a nation, we are not in quite the same position as the poor schmuck who faces foreclosure and unpayable bills because we can find the investment cash without going to the bankers or the casino.  We can put unemployed people to work doing things that will certainly return more than the investments cost.  We also get all the taxes these employed workers will be paying instead of having to pay for the welfare and destruction to people and communities.

Korten knows the banking industry and the World Bank, IMF.  He exposes their lies and delusions very well and points to where real value is created.  Enjoy the learning curve.

MEJ's picture
Been there read that, DRC,

Been there read that, DRC, but it doesn't answer my question. That's probably because I haven't properly asked the question.

I'm not asking about wealth ( Guns Germs and Steel by Jared Diamond seems like the best and most thorough explanation to me, btw), I'm asking about MONEY and the creation of monies.

Supposedly there's about one quadrillion dollars worth of derivitives floating around the world's finincial markets which is about 15x the whole planet's GDP. It didn't exist twenty years ago.

The USA has a $14 trillion deficit, right? Europe is in a finincial debt crisis, right? Who is all that money owed to? It aint China, they own less than 8% of our treasurys, right?

The Wizard of Oz is an allegory, The Secret of Oz. It's not really a secret the Federal Reserve is privately owned. Ron Paul is a crazy old coot, but doesn't he have a valid point about the Fed?, sort of?

Isn't that what Krugman is addressing? Did you read the Krugman pieces?


Sprinklerfitter's picture
I'd say most of the debt is

I'd say most of the debt is owed to those banks who own the federal reserve and the federal reserve itself. Poly mentions the Bank of North Dakota all the time and I've often wonder why every state doesn't have their own state run banks and cut the big banks out completely. That makes good business sense to me for the taxpayers to have a choice like this.

Our country will never pay the debt off it owes and those who own the debt want it that way to keep collecting the billions in interest they recieve every year....Can't say I blame them but the federal reserve needs to be shut down for good. The way they operate reminds me of those payday loan places that charge high interest for loaning you money till your next paycheck arrives.

The movie....."Plunder...The crime of our time".... talks about all the issues you addressed. It's certaintly a time bomb looking for a place to go off and if it ever does we're all screwed thanks to the bankers who are responsible but likely will never see the inside of a prison cell.

DRC's picture
Funny you cite the Wizard of

Funny you cite the Wizard of Oz, because Frank Baum's allegory relates to just that alternative to "Kansas."

If you want to know about "money," try David Graeber's DEBT: A 5,000 year history.  It is all about money and its origins and nature.  It will surprise you and give you a new perspective on many things.  Wouls you believe that money always has its origins in a "great crime?"  Seems so.

The Banking/Monetary system

The Banking/Monetary system explained very simply in an animated video. It's origins, how it functions, the flaws.

All U.S.. currency in existence comes into being only as debt. It has to be borrowed before government can print it..As debt is repaid, money is withdrawn from the money supply...and more money has to be borrowed into existence. or money would disappear entirely..There comes a time when additional debt can't be repaid out of an economy. 'Tis a fatal flaw in our monetary system.

Retired Monk - "Ideology is a disease"

Are you asking what is the

Are you asking what is the purpose of Federal Reserve/Central Banks?

And are you asking what was and is the purpose of banking  and why and how it evolved?

And have you really thought about the purpose of debt? Is it all bad? or is there something good about debt. Think hard and carefully because as crazy as it sounds...

Also note, the old advertising jingle from 7-up was "Too much of good thing is bad!" every thing in moderation!! :) Too much debt is a bad thing especially when one can not service it; however, in moderation, ...


DRC's picture
Too much debt is about having

Too much debt is about having to pay the wrong people for the wrong (waste) spending that did not pay for itself.  Servicing that debt pays tribute to the captor or "owner" who is not putting the money where it is needed.  If we decide that we cannot feed people and have to let them die because these debts must be serviced, we get a catastrophe.  If we decide that these debts have to go away, those who can afford it get left holding the bag.  How do we take care of people in a financial crash?  However difficult it is, it is a lot easier than having a social disaster to save the money system.

There is no question that financial irresponsibility has been practiced.  There are serious questions about the way we have created the money to feed this economy as well.  The issue before us with deficits is that failing to spend what people need will not heal the budget and will cause a lot of damage.  Further debt created to address real human needs will have a positive economic effect.  It will produce sufficient value to justify the investment.  If we could also stop the waste of war and crony capitalism, we would not be arguing about borrowing for good investment opportunities.  If we were willing to call the bluff of the banksters, we could also do better than continuing to pay them tribute.

If moderation is the virtue sought, it needs to be achieved by attacking waste rather than investment.