Sam (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
l33tminion) wrote2007-06-27 05:40 pm
l33tminion) wrote2007-06-27 05:40 pm
Consolidated Links
Been a while since my last links post. Here's the niftiest of the nifty I've encountered over the past few weeks:
- Strange Music Videos: Gnarls Barkley on a Theremin, Super Mario Bros Theme on Tesla Coils, Song Composed of 37 Cello Parts, World Champion Whistling, An Awesome Audition (the best thing to come out of the American Idol franchise)
- Japanese TV Classics: Algorithm March (With Ninjas), The Troop of 100
- Politics: A brilliant parody advertisement about drug policy, a game explaining redistricting reform
- Scarier Politics: Money as Debt (an animated short explaining the modern monetary system, which I found rather worrying), America: From Freedom to Fascism (which covers some of the same issues and discusses the IRS's surprising inability to find the laws that require Americans to pay income tax)
- Random Essays: A Motorcycle Ride through Chernobyl, How to Teach (an essay on teaching and disability), How Kids Lost the Right to Roam
- Harry Potter: McGonagall is Evil (I preordered my copy of the last book, too... *is excited*)
no subject
Metal backed currency is a disaster in it of itself, unable to grow in terms of wealth or productivity. Now, our perception of wealth has left a metal standard, and become a service and goods standard. I expect that my dollar, will buy me a dollar's worth of product or service. This is much like how those european traders needed loans of non-existant gold certificates to create trading empires. There is a finite amount of metal in this world, and it's become a world with too much wealth to back on existing metals. But the "debt" isn't as haywire as the video tries to scare you into being
The "debt" of currency to the bank is enforced by the multiplier effect(roughly the 10 times the initial investment.) The Federal Reserve doesn't say, "oh we need more money, so let's increase the reserve to issue more loans." The video fails to focus on inflation and deflation factors. The more money there is, the more it is devalued. Countries who issue money willie nilly face hyper-inflation. Again, the fractional reserve stems the growth of money, when the federal reserve think 100 million dollars is needed in the economy, they can choose to do several things. decrease the federal rate (thus advising a decrease in the interest rates of other banks) making money cheaper, leading to more loans being lent out to increase GDP by 100 million by a loan multiplier. The government can literally spend the money they have in the bank to infuse more cash into the economy (which is the current problem, since we're borrowing money from American banks who sell the tickets of loans called "bonds" to overseas nations who wish to invest in the US). Or they can change the fractional reserve requirement from 9:1 to something else. Usually, people just go with the Fed interestest rate since it's a good way to signal what hte Fed Reserve wants to do with the banks and let the banks do their own policing.
So why let inflation happen? Why create a deeper bubble and dig ourselves a deep hole? Well, we could move to increase interst rates, and reduce the amount of investment in business. This would lead more money to return to the bank to collect interest instead of being spent in the market. Less money moves, and in the worst case we'll have unemployment since businesses may chose to downsize in reflection to a slowing of the economy.
The idea of the bank is to increase the wealth of the nation by balancing the economy between inflation and deflation. Not to cheat people by creating infinite amounts of money and hoping that people keep borrowing it.
That's the reverse, borrowing money to increase one's wealth is the point of debt.
I stopped watching at about 20 minutes in... it just wasted my time to listen to this bull shit.
So to sa
no subject
The economic problem today, thus, is not the banks, but rather the unlimited borrowing the nation does. The national debt used to be a tool to control the economy. Decreasing the debt (paying the banks back) decreased the value of the dollar, but created more money to be lent out, increasing it dried up money. The government can spend more money (public services what not) to infuse the economy with more cash, or cut spending and sit on money (or debt) to fight off inflation and encourage less spending.
Today, we borrow from the nation's banks, who lent us the 8.8 trillion dollars for the war and what not. That money is infused into the economy and comes back in the form of taxes. We're just not paying any of the banks back and spending it more on government agencies... like the Department of Defence's pork bellies. What the danger that entails from this is that American banks don't have that much more money left to lend around, so they elect to find people who will pay off the US's debt and become the NEW lender. This, for the most part, is currently China who own about half of our national debt. That's the problem. Our assets are becoming more and more dependent on another nation. If China decides to ask for their money, we're going to default on the loan and tremendously sour international trade relations. The value of the dollar would then plummet as no other nation would want to with us, or at least with our money.
if you'd like to see this happening now, go to poor nations like Haiti which demand US dollars rather than their own currency since a US dollar is actually stable.
no subject
At least not more than you can mine more metal. But yeah, I wouldn't suggest a return to the gold standard.
So to say that money is debt, is not necessarily untrue, but it's not a danger to our well being.
Well, backing your currency with IOU's is not inherently a bad thing, I agree. However, it seems that a decrease in the ability to pay back those loans, coupled with a fall in value of the collateral with which those loans are secured (houses, mostly), would leave our currency in rather bad shape. Unfortunately, I think peak oil presents just such a situation.
This, for the most part, is currently China who own about half of our national debt... If China decides to ask for their money, we're going to default on the loan...
That prospect worries me quite a bit. US and China are currently big competitors for energy, so I don't like them being able to destroy our economy at will. Of course, that would hurt them quite a lot, too, but I can imagine situations where it might be worth their while.
if you'd like to see this happening now, go to poor nations like Haiti which demand US dollars rather than their own currency since a US dollar is actually stable.
Or Zimbabwe.
no subject
Peak oil is part of the problem, though energy technologies (at least in California, or at the least my school [which is full of hippies]) are being heavily invested in, so I'm hoping that the oil crisis will be moved to a smaller problem in coming years, if not soon.