Mike Maloney 'Debt Collapse' is live, full 90 minute presentation

Just a question about the gold standard - when they dropped it back in the 70s gold was only $35 an ounce. That doesn't seem like any where near enough if it backed all the money in circulation at that time unless there was an enormous amount of gold in storage to back it.
 
ReturnToZero said:
Good Points. Just to clarify though, gold in the vault still equals the value of gold not in the vault right? So on a scaled back example, if $1,000 is backed by 1 ounce, in theory, I can take 50 ounces from my stash and go buy a new car as I can exchange my 50 ounces of gold for $50,000 worth of gold backed dollars with a gold dealer. I guess this would only work if that exchange is made illegal, at least in a large scale?
Otherwise if the entire US economy is backed by 8000 tons of gold, and China has 5000 tons, they can theoretically change their gold for dollars and buy one hell of a lot of stuff in the US.
I need to read more on the gold standard, this stuff is giving me a head spin lol.
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Well gold outside of the vault would be the same value but it would all depend on wether the car dealer was happy to use it as a medium of exchange. There would have to be changes in the tax code to reflect this so the dealer etc can be charged his taxes. If it was in place, it would be easy enough to exchange the gold for cash at the bank. Bank hands it over the (New) Fed Reserve and they get to create more paper dollars to the equiv value = the much needed inflation we all need to grow. Forget about China being able to buy "more" stuff because they have lots of gold. THEY currently own something like 3 trillion in USD and US bonds or something ridiculous like that, or was it 1.3Trillion US and 3 trillion total? I'm pretty sure they don't have 3 Trillion worth of Gold at todays value. If they wanted to buy up what ever you are worried about they could do it now no problem at all.

The US just doesn't have to make it interchangeable at all ever again. All they have to do is continue to Audit the gold reserves to ensure they directly represent plastic dollars in circulation and confidence would be restored in the USD while ever they held true to that.
 
goldpanner said:
Just a question about the gold standard - when they dropped it back in the 70s gold was only $35 an ounce. That doesn't seem like any where near enough if it backed all the money in circulation at that time unless there was an enormous amount of gold in storage to back it.
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That was what I was thinking, they will either have to have a crapload of gold or the value of gold would be many multiples of what it is now to back everything.

Hopefully it's the latter - hello house for 10 ounces of gold :D
 
hbBear said:
My understanding of fractional reserve banking is different to this, so perhaps someone can correct me if im wrong.

I was of the understanding that if $100 is deposited with the bank (under a 10% fractional reserve system), rather than the bank lending out $90 of the original $100, it actually 'creates' $900 out-of-thin-air which to loans out. It retains the original $100 which it stores as its 10% reserve against the newly created $900 ($100 being 10% of $1,000).

The 'crime' (in my opinion) is that the bank provides no consideration toward the loan contract that it enters into with the loan applicant. The bank creates the new money out of thin air (costing it nothing) however the loan applicant is now required to provide their time, effort and labour in order to create wealth that can be used to pay back the bank with interest.

Should the loan applicant default on the loan then the bank claims the items of REAL wealth (i.e. the home if it was a home loan)
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Yes, you are wrong. If it works like this just think about it for a second.

You claim that when you deposit 100 in a bank the bank then uses it to lend 1000 to the next person. OK, that person then redeposits the 1000 and by your system the bank can lend out 10,000 the next time This gets redeposited and the bank can then lend out 100,000 the next time. It only takes 10 iterations of this and you are at 1,000,000,000,000 (a trillion dollars). For the vast number of loans that are given in Oz the M3 would be at some truly astronomical number something like 10 to the power of a billion.

Banks don't create money!! The time factor of money makes it look like it does, but it's just an illusion. What you have to remember is that it is the money that the bank OWES you that is in your account, not money itself. Just as if I lent you $100 you would owe me $100 or to put it in banking terminology I would have $100 in my account with you. If you add that $100 in my "account" with you to the $100 cash that you now have, that adds up to $200, but no money has been created.
 
Yippe-Ki-Ya said:
Dwayne said:
Yippe-Ki-Ya said:
Money is stolen from all other people holding that currency though dilution. Never Gonna Give You Up???
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Again, that may be stealing but it isn't stealing deposit money.
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oh gooddeeee!!! i'll put the bankers back on my Christmas card list then ... :lol:
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Just cause the banks don't create money doesn't mean by any stretch they are on my XMas list. I'm highly critical of them. But you have to be for the right reasons. Claiming they are fraudulently creating money redirects away from the real problems. Things like over-leveraging and reckless lending.
 
Don't want to overdo this but just wanted to add this which I wrote on another forum

I think one of the problems, which was a roadblock for me, is thinking of debt as a physical thing, or somehow seperate from money(cash). The debt isn't anything. There is just an amount of money that the bank owes you and is paying you interest on, just as if you owed the bank money you would have to pay interest on it.

The multiplication of money is really just a multiplication in the amount of money that is owed. It takes a bit of a mind shift but once you get it's actually really simple.

It's like say you have three friends (A,B,C) and you had $100 of cash and they had none.
You lend $90 to A.
A lends $81 to B.
Now you have $10 cash and a promise to pay $90 from A. A has $9 cash and a promise to pay $81 from B. B has $81 cash.
Now say you want to buy something from C for $90. You don't have $90 cash, you only have $10 cash and a promise for $90 from A. But you say to A, "OK, instead of owing me $90 you now owe C $90." And you then take the $90 product from C.

Now you have $10 cash. A has $9 and a promise to pay $81 from B. B has $81 cash. And C has a promise to pay $90 from A.

If you have $10 cash in your pocket and $90 in your bank account, you actually have $10 cash and a promise to pay $90 from the bank.

Hope that's clear.
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In the above example there is $100 cash and $171 worth of promises for a total "money supply" of $271. This of course can be lent out further to a theoretical limit of around $1000 (composed of $100 cash and $900 of promises).

You can do FRB with your friends as shown above. Wow, I can create money just by lending it out the same way as the banks "create money"!
 
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