This was a really interesting talk regarding the history of debt and really gave me a perspective that, even with everything I've seen and read, I'd never heard or considered before. Those who are dead set against debt may reconsider their stance after listening, but probably not quite in the way they might think... [youtube]http://www.youtube.com/watch?v=CZIINXhGDcs[/youtube]
Excellent. Puts the cat amongst the pigeons of valuing gold and silver in post-collapse life. The idea of (silver) coins being useful only in the context of militarised societies was worth the watch on its own. Notable, however, was his examples of a post/pre-financialised economy did not really include the idea of high-density urban environments as we exist within today. Very thought provoking.
great talk! but why does he always pick up the cup but never take a drink? the suspense was killing me to when he will drink it and not just lift it up & put it down again.
I think it was very interesting until about the 56:00 minute mark where his analysis breaks down due to a misunderstanding of why the credit needs to be extinguished under a credit based system. Also his assumption on where we are democratically in what promises are to be kept and not etc etc. The problems always arises in a credit based system when promises to pay debts are made that can never be kept in the first place begin to skyrocket. While the system is in its infantcy and adolescence these issues are easily masked over with the creation of new credit simply filling the void the defaulters create but the debt does not get extinguished. As the system matures the debt over time plus interest becomes too much to bear and the system collapses through an outright deflationary event which extinguishes the debts and exposes the malinvestment or more intervention through vastly inflating the amount of credit attempts to fill the void again and vastly devalues the wealth of everyone using the system. While this system of constant inflation even at lower levels does exactly the same thing over time, the ability of those to cope with the inflation is better than when the inflation goes parabolic. Same result though but over a shorter period of time. If you have a monetary system based on a commodity like gold that can not be easily created to be used at a whim of a government so they get to chose who gets bailed out and who does not. Then the propensity to lend money to people who are unlikely to ever pay it back is restricted significantly. As those that do so, know, that if they continue it, the debts that are owed to them will be extinguished leaving them out of pocket and bankrupt just as fast as those they lent the money to. The real challenge for democracy right now is not to decide what promises are to be kept or not but do we punish heavily everyone for the poor decisions of the few and the consequences of the few get beared on the shoulders of the many? Or do we let the cards fall where they may, make the few (and the many) learn from their mistakes so that they never be repeated again or at least without knowing what the consequences of such actions will be?
I don't think it was his and his subconscious told him to pick it up and his conscious told him not to drink
Nugget of a presentation hawkeye. Strongly recommend viewing, particularly the way we have in human history actually created real free markets - regulated by civil courts outside the paws of big business or should we say their puppets - states & central bankers. This is covered in the 2nd half of the presentation.
OK, I'll try my best, I'm still dissecting his ideas (currently reading his book). I think the point is in the modern world that debt is basically controlled by the govt and a cartel of banks. That it's not a bad thing for people in the community to be in debt to each other, in fact you would probably say it's necessary. When communities were small you had debts to each other and it was built largely on trust and reputation. ie, you would give something to someone if they were trustworthy and repaid their debts. As things scaled up with govt's and countries and empires this model doesn't work too well, which is where I think he talks about money for armies. After all, govts/countries/empires require armies. It could be that the cycle is now turning and we are going back to more community like situations where people deal more directly with each other again. It could be argued the SS community is an example of this. It seems like better communication channels and us all being part of a smaller world as a result is leading toward this. So maybe gold and silver are not as necessary as we think and are basically just necessities, to some degree, for these big financial and governmental institutions. I don't know but it's stuff I'm mulling over. I like this guy's way of empirically approaching things.
I definitely don't think debt is a bad thing. Especially when it is between two mutual parties like in his examples of the two people bartering over a cow. When one of the parties must hold off on spending because he has lent to another, that is a healthy relationship as the lending person is going to only lend if he is utmost confident of being repaid with interest. Where everything gets f$&&$&d up is when the restrictions on spending aren't there because of the creation of dollars out of thin air. Everything starts going up in price and prudence goes out the door as the system dupes people into thinking they are missing out on all the gains. All the smart money has already found the most prudent expenditure and profits get pushed along the risk curve with the rest of the flooding money.
I think the fundamental problem with our money is not that it is fiat, but that it is a monopoly. The Gold Standard itself is still a monopoly and still open to abuse as indeed we have seen through history. When it gets too inconvenient, a government will just default, blame the GS and then it's off to the fiat inflation races again. I think people should be free to choose how to transact with other people using whatever means they wish. Who knows what that might be, but I think looking to the past gives us some clues. And I think the thing about the barter-to-money being, in reality, a complete myth is very interesting. At the end of the day it is the coercion that I have a problem with. Let's free everyone from the obligation to use any particular means of exchange (in our case the Aussie dollar) and then see what they want to use. See what emerges from human creativity.
