The human mind is capable of believing may things that are not true; chief among these are myths concerning money and our banking system. Separating fact from fiction is one of the hallmarks of good science. In these challenging economic times it is important to understand the facts regarding our monetary system.Myth: Money is created exclusively by the Government.
Fact: Approximately 95% of money in circulation is created by private corporations known as banks. Only 5% is created by the Government.
Myth: Banks loan out money that has been trusted to them by deposits.
Fact: Banks create the money they loan -- not from the money's own earnings -- not from money deposited -- but directly from the borrower's promise to repay. They create money from debt -- out of thin air.
Myth: Banks loan out no more money than they have in reserve.
Fact: Banks hold only a small fraction of what they loan in reserve. They create new money directly from debt.
Myth: The U.S. Government backs each dollar of paper money in circulation with gold.
Fact: The Gold Standard was finally abolished in 1971, replaced completely by fiat currency. Paper money is back by essentially nothing.
The following video, "Money as Debt," tells in very simple and effective graphic terms what money is and how it is being created. It is a painless but hard-hitting educational tool for those concerned with the present unsustainable monetary system in the United States and Canada.
Thomas Jefferson and Andrew Jackson understood "The Monster," but to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates. Dedicated to Murray N. Rothbard, steeped in American history and Austrian economics, and featuring Ron Paul, Joseph Salerno, Hans Hoppe, and Lew Rockwell, this extraordinary new film is the clearest, most compelling explanation ever offered of the Fed, and why curbing it must be our first priority.
US Money Backing
While the overall gist of the videos are good, the simplification of these videos would lead people to believe that the US dollar is currently backed by 90% debts that can never possibly be paid off (IOUs) and 10% gold.... however, gold is not the only commodity that the US dollar is being backed by. What about silver, copper, platinum!? Or moreso, the monetary value of the dollar is really determined by market prices which essentially is a random number generator that bounces up and down like fractalized brownian motion.
http://www.reuters.com/finance/markets
questionable article
I love this website and I'm very appreciative of the efforts of everyone involved with maintaining it and creating content. However, I have a couple of problems with the posting of this article.
First, I question the relevance of this article to Machines Like Us. I understand that the scope of MLU is very broad, but editorials about economic policy seem to be stretching it.
Second, this particular viewpoint is quite controversial and editorial in nature, and the article was not positioned as such. MLU can and should take a particular stance based on the community it wishes to attract (by espousing the virtues of atheism, for example), but this sort of principled position must be made explicit (as it is for atheism). If it is not made explicit, the integrity of the site suffers - readers are left to assume that the ideas expressed in the article are endorsed by the site. Or worse, readers may assume that the article should be read in the same way as the majority of the articles posted here, as expositions of scientific research and thought, which could be cynically viewed as overt manipulation. I know that's not the case, but the site becomes open to that kind of criticism.
Third, if the content of the article is not original, its source needs to be linked. If it is original, the author ought to be indicated more obviously.
If I didn't care about the website I wouldn't bother to post this. Thanks for reading.