Hey there folks, was talking recently with a friend who had viewed the Zeitgeist documentaries. I told my mate what a crock of shit i thought they where, which is kind of ironic, as i was the one originally who fell for the bullshit a few years ago, which incidentally led me to the Ron Paul movement and then on to here. Anyway I’m going to talk to this mate of mine about the whole money as debt thing, but before i do, i thought I’d come on here just to make sure i got everything right and not forgetting anything.
Money is not debt because
a) Value is subjective
b) We only value fiat money because Government coercion
I think my friend will probably reply with some thing like “So what they are in power blah blah blah. Capitalism is evil evil evil, with every dollar created the more debt there will be”.
To which i will reply
a) Fiat money can deflate as well as inflate
b) Governments do encourage inflation to help pay they’re debt.
When fiat money loses it’s purchasing power due to inevitable hyper inflation, no one will value the dollar. Of course when this happens we may still be in debt, we may have taken out loans to purchase property etc. But we are indebted because of this, money was only the means of exchange, correct ?
Instead of white-washing the modern economic system, I think that you should point out that this system under which we all live is not capitalism but some form of plutocratic socialism in which banks are given special privileges. And in some sense, the notion that money is essentially debt is accurate.
Even Murray Rothbard described our economic system as “the web of special privilege that is being accorded to the nation’s banks. First, they are allowed to create money out of thin air which they then graciously lend to the federal government by buying its bonds. But then, second, the taxpayers are forced in ensuing years to pay the banks back with interest for buying government bonds with their newly created money.” (Mystery of Banking, p. 172)
I don’t quite understand exactly what you’re asking.
We are forced to use fiat money as a medium of exchange when trading our labor or produce. It is the unit of account. We value money for what can be purchased with it. Money is a commodity, only that legal tender laws force us to use the pieces of paper issued by the gov’t. The problem is that gov’t has a printing press to counterfeit the money. As for fiat money losing its purchasing power on a massive scale, it is not due to capitalism. It is due to gov’t debasement of the money due to their printing press.
There is nothing evil about debt. If I have two fish and you have none there is nothing wrong with me loaning you one fish. Why would I loan you a fish if I don’t have full confidence that you will repay it? If you promise to repay me two fish then that is an incentive for me to loan it to you. If you agree to pay me two fish and I agree the potential gain of a fish is worth the risk of extending you the loan, you and I both obviously believe we are benefiting from the transaction. Otherwise we would not make it.
As for money being debt, no it is not. It is just a medium of exchange. It is the currency used to facilitate trade of labor for goods. However, all new money is loaned into existence. When gov’t creates new counterfeit money, that money is brought into existence by the extension of a loan using the counterfeit money. You get the counterfeit money and buy that one fish from me. You did not obtain that money by producing some other item of wealth that can be purchased with your money. The counterfeit money you have is not backed by any produced goods or wealth. It is worthless. But I accept it and give you my fish. Now it is your job to produce a fish and sell it back to me. The value of the money you gave me has now diluted the existing stock of money (in the economy) and I will have to pay more money to buy that fish back from you due to inflation. But that’s how the gov’t run fiat money system works. New money is brought into existence by the creation of new loans using counterfeit money. That is not how capitalism works. It is how gov’t enforced fractional reserve banking and legal tender laws work. If banking rules were set by free market capitalism, gov’t would not control money and banking and would not be permitted to counterfeit the money at their own discretion.
Please read this article for a brief synopsis on what money is. Unfortunately, the modern fiat money/fractional reserves clusterfcuk mixes the issuance of money and the expansion of credit into one big inscrutable tarball (for the very purpose of making it as difficult as possible for the layman to understand exactly what they are doing).
Money is money. Credit is credit. The two are separate, except for the artifices of our anti-capitalist money and banking system.
Money is debt because Federal Reserve Notes and Reserve Bank credit are liabilities of the Federal Reserve. On the other hand, these “liabilities” do not make the Federal Reserve liable to provide anyone with anything for any reason at any time (thanks Nixon!). So money is NOT debt.
Money is not debt. The confusion stems from the fact that fractional reserve banks use their credit to make the money supply appear larger than it truly is by loaning to people out of their credit.
From what I remember of long threads here by the “money is debt” school of thought. their argument is roughly this:
Moeny in and of itself is not debt. If the good ole US of A would do the honest thing and just get out the printing press on the White House lawn and print money, then we would achieve Heaven on Earth. For such money is not debt at all. it is manna from heaven to lead us to the Promised land.
The real problem is that the evil banks have taken the virgin innocent called money and forced her into prostituion, with the banks as pimp. Because in practice, the only way new money [meaning new electronic equivalents of those green pieces of paper] is ever created is as part of a loan. When and only when someone walks into the bank to borrow money is new money created. That’s how it is in the real world. So with every new dollar comes new debt, plus interest of course.
Thus, instead of the blessing of beautiful new money being introduced into a poverty stricken world, we are artificailly forced to give birth to an evil twin sister to the lovely dollar, DEBT with interest.
This is why the country is sinking deeper and deper into debt, and why the printing of money, which should be our salvatioin, is instead our destruction.
P. S. I personally think this is a crock. But I suspect this what the OP’s pal is going to argue, so he better know the pal’s argument, and the correct refutation.
Smiling Dave your spot on, i still haven’t had the inevitable argument, It’s actually gonna come from two friends i know it, they watched it seperately on the same day.
Trouble is I’m still not 100% of my argument. I’m still a beginner, tbh i actually came from the Zeitgiest propeganda myself, from there to the Ron Paul movement and from there to the Austrian School.
I know what money is, It’s just a means of exchange, i understand this. There where lots of good points on this thread, for example the fact that FED money is not backed by anything. the fact that when interest is paid back, bankers then spend it, closing the circle if you will.
Anything else i should know, anyone have any experiance with the Zeitgiest ppls ?
One of the symptoms of minarchism. Although I’d say the financial nobility are almost as much a part of the State as the politicians, so he’s at least half right.
You are chained to the State, and not to some class of financial nobility that would could not exist without the State apparatus. It is only the desperate attempt to hang on to the myth of the limited State that leads to such misguided conclusions.
