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[abculatter_2]

What part did I get wrong?

Dude, it's not that we didn't get the message, we did.  We're calling the message nonsense.  And now you've expanded it to coins, thinking that metallic discs have some kind of "intrinsic value" no doubt, oh boy.

Sorry but this was probably a bad time for me to make this thread, I'm about to leave...

The problem with our current monetary system, is that the banks and Federal Reserve have complete and total control over how much money is in the system, due to fractional reserve banking and the fact that the Federal Reserve is the only institution which can print US dollars.

And, to explain what Fractional Reserve Banking is, for those who don't know;
The banks can get $10, and loan out $100, legally.
This is why we have inflation; a bank gets just $10, and now, they can just POOF $100 into circulation, WITH interest, out of absolutely nothing. And that's assuming they play by the rules, but people aren't always watching the pencil-pushers, and they have a LOT of money...

However, 100% of this money has debt attached to it, with interest, including the money printed by the Federal Reserve. This money is never given away to the government or people, it can only be borrowed as a loan.

That means, basically, that the only way we can make more money right now, is to make more debt to the banks. But how do we pay off that debt? How do we pay off the interest, if the only way to make more money is to borrow it?

[Aqizzar]

The problem with our current monetary system, is that the banks and Federal Reserve have complete and total control over how much money is in the system, due to fractional reserve banking and the fact that the Federal Reserve is the only institution which can print US dollars.

And, to explain what Fractional Reserve Banking is, for those who don't know;
The banks can get $10, and loan out $100, legally.
This is why we have inflation; a bank gets just $10, and now, they can just POOF $100 into circulation, WITH interest, out of absolutely nothing. And that's assuming they play by the rules, but people aren't always watching the pencil-pushers, and they have a LOT of money...

This is where the grain of truth comes in that some nutter can seize and run to the hills with.  The issue, and mind you it's a new one caused by the 2008 lending collapse and not some hundred year old conspiracy, is that the Federal Reserve lending window is giving out bank loans (under certain circumstances) at a lower interest rate than the payout rate on Treasury Bonds.  The Federal Reserve is basically generating debt right now, because money policy has gotten so screwed up trying to put out fires that the Fed is allowing a certain class of banks to make their own free cash by lending the Treasury back to itself at profit.

At no point was it ever about the government having the magical power to print unlimited currency and have the rest of the world accept it at face value.

[Sowelu]

But all currency is by nature debt, even in the very first most basic step up from the barter system.  They are IOUs which are accepted pretty much everywhere.  Whatever issues we may have with the rate at which money is created, money is -by definition- a debt owed by society to the holder of the money which he or she can cash in for goods or services.

Hoo boy, I'm going to regret posting here, because this thread will stick around in my 'unread replies' forever and I can never get rid of it.

[Mr. Palau]

However, 100% of this money has debt attached to it, with interest, including the money printed by the Federal Reserve. This money is never given away to the government or people, it can only be borrowed as a loan.

Actually if you worked at the fed, the money they would pay you with would have no interest on it. Same goes for banks paying their employes, the money they created would be debt free.

In fact, the only involvement the Federal Reserve has with the government is that the president elects two of its board members.

Factually incorrect, the entire board of Governers of the Federal Reserve Bank are nominated by the President and confirmed by the senate. Thats the governing body of the Federal portion of the bank. The regional boards are elected by banks. Oh and the regional boards only have 6 out of 9 members elected by banks.
http://www.federalreserve.gov/aboutthefed/bios/board/default.htm
http://www.federalreserve.gov/pubs/frseries/frseri4.htm

However, the Federal Reserve, despite its name, is actually a private corporation, owned by private shareholders.

Untrue, regional boards have stock held by private corporations, but those stocks can not be traded, or sold, and ownership is mandated by the Fed. No one owns stock in the National Fed.
http://en.wikipedia.org/wiki/Federal_Reserve_System

I can't really disagree with you on anything you are saying because you havn't articulated any benefits to changing the system, so theres nothing there.

[FuzzyZergling]

I don't really have an opinion on this subject, but I thought I'd just pop in with this relevant song.

[Flying Dice]

And, to explain what Fractional Reserve Banking is, for those who don't know;
The banks can get $10, and loan out $100, legally.
This is why we have inflation; a bank gets just $10, and now, they can just POOF $100 into circulation, WITH interest, out of absolutely nothing.

Not quite. The way fractional reserve banking works is this:

Bank takes in $100 in deposits. The Fed requires the bank to retain a certain percentage of that in cash reserves; we'll set it at 10%, so in this case, $10. The bank can then loan out the remaining $90. This, in effect, means that $100 in deposits creates an additional $90.


I don't really know why I needed to explain this.

[Wayward Device]

One thing thing no one has mentioned is the effect that the black market has on the US dollar. Because $ is the defacto currency for illegal transactions worldwide, some like 1 in ten of all US bank notes are never used in the "real" economy. Because of this, America basically gets a giant free loan. Sorry I can't provide more coherent, reasoned argument, links or discussion of relevance, but its Friday night and I've been drinking rum. Quite a bit of rum. Anyway, the point I'm trying to get across is that currency and the different ways you can do it is a disgustingly complex issue.

Right, I'm done, if I write any more this is going to dissolve into me ranting about how you should never listen to an economist unless they're issuing proclamations from their solid gold moon palace.   

[Flying Dice]

Right, I'm done, if I write any more this is going to dissolve into me ranting about how you should never listen to an economist unless they're issuing proclamations from their solid gold moon palace.   

Shh, you weren't supposed to tell the conspiracy theorists about that! After all, it isn't as if every US citizen who doesn't make rambling, insane documentaries has a winter home on the dark side of the moon, right next door to the secret Nazi moonbase.

[Wayward Device]

Are you trying to say that the world hasn't become more racially tolerant over the last 60 years, it's just that all the Nazis have moved to the moon? It all makes so much sense now!

[chaoticag]

Does anyone know if these guys have any background in economy? All I know is the Director is trying to run for the Libertarian Party, and the producer wrote an essay on the same issue.

[MrWiggles]

I would love to hear more about how the illegal global economy is isolated from the legal global economy. That sounds fascinating. Does anyone have any links on that or books?