I was sent this post by a friend we have been in correspondence about various renewable energy questions.
There are conspiracy theories for everything at least as many as there are economics schools of thought there are uncomfortable parallels to both when one considers that both are belief systems and both schools of thought have what might be considered more exotic and other more rational or mainstream propositions.
Money and the monetary system is a concept and I would question the objectivity of the original post in a Kantian sense. Representing itself as a reasonable debunking of objections to Debt money I think is intellectually dishonest.
I have not seen the offending film but this blog is no less a pseudo-authoritative piece of rhetoric and that is the problem for Economics its premise is client driven and the pluralities in its subjective assumptions are not sufficiently countered by a righteous sense of the fallibility of these self-styled masters of the universe.
Its all really rather comical.
I suspect that this blog will reflect the bulk of the Argument for the proposition that the Status Quo is a workable base, I will be considering its essence and making some models based on the motivations behind some of the propositions using technology to make models for predicting outcomes is all well and good the big question is peer review and screening for bias and motivation. Uncertainty exists in all systems the motivation that leads to the action to stimulate the motion are not natural Market phenomena they are man-made and motivation becomes even more important when we consider that.
Things really have a habit of coming full circle, Grignon’s work, the original writer and animator of the Money as Debt film which the writer of Sounds familiar blog found such absurd knockabout nonsense is actually far from wrong, he is absolutely “bang on the money”, as it were.
“Money As Debt is a roughly 45-minute presentation that attempts to explain what is wrong with our current monetary system, how it will inevitably lead to disaster, and what to do about it. It is riddled with silly basic errors, made-up evidence, and falsified quotes. It contains almost no citations for any of the arguments it presents. It pretends that it is the only game in town, that economists are completely ignorant of money. And it finally devolves into an outright unsubstantiated, nonsensical, conspiratorial claim about evil international bankers.
It’s a real hoot.”
Another of the Cult of Mammon.
Swimmy Lionni said…
Thanks for your comments, Marc. I’m glad you found my post informative. Hopefully, this comment will be informative as well.
Here’s the first lesson: if all lending in the economy were to cease at the same time, money would not disappear. We would have less money, but not no money. We would have, exactly, the monetary base.
Here’s the second lesson: if all lending in the economy were to cease at the same time (money multiplier = 1) and the Federal Reserve were to print a whole lot of money at the same time–specifically, if the Fed were to multiply the monetary base by whatever the money multiplier was the day before lending stopped–there would be no change in prices.
To state it more succinctly, in math:
M = Money supply, MM = Money Multiplier, MM’ = second money multiplier, pi = inflation rate
Day 1: M = M0*MM (MM > 1)
Day 2: M = M0*MM’*pi (MM’ = 1, pi = MM)
Therefore in Day 2, M = M0*1*MM. No change.
MAD is centrally about the unsustainability of fractional reserve banking. But because it ignores the impact of the monetary base, it is simply wrong. The money multiplier can change rapidly and there will be no complete economic collapse as long as the monetary base remains intact. Furthermore, with discretion over the monetary base, the Federal Reserve, which MAD paints as a kind of Ultimate Bad Guy, can actually prevent an economic collapse by responding to changes in the multiplier.
I know this is complicated, and you’re right that economists don’t do a very good job teaching it
Well, folks, I am still unable or, probably just unwilling, to dumb everything down to a bumper sticker. My past few weeks have been a struggle to get myself back up to match performance to finish off Conquest of Dough. I have the Spring Cleaning to do at Lewis Towers, and following a few days of donning my pinny, think Roger Daltrey in Mc Vicar.
It will be out with the old quill and the scribbling Olympics, pre-order your copy now.