Bratty, you should know better than to mention that guy around here, it won't do you any favours as everybody here will think both you and he are idiots.

Shockwaffle, your example is interesting. However, the video is not trying to explain that part of the economy is untrue because it's imaginary. It's merely looking at the creation of debt as a cornerstone of the system. For the record, I don't watch videos on the internet and spout them verbatim as my own opinion, or even fact. I grabbed that one as a quick response to Oli's question.



So car mechanics can't possibly be smart enough to understand you?? Really?? Could you be any more aloof?? WHISKY [LIFTED] TANGO?!?!

I'm not disputing that only central banks can create money, but to the man in the street the amount of money they create could quite easily appear to be infinite. The "finite" resources of the world continue to be exhausted, fish stocks are depleted, farms cannot supply the needs of the rapidly growing developing world, fossil fuels, deforestation..... the list goes on. And yet people continue to generate wealth from nothing. Just by accumulating interest on debt.

I don't profess to be an expert, I'm simply saying it's obvious that a vast majority of the money in circulation in the capitalist system has no basis in a commodity. Oli asked who was in credit when everybody is in debt. I answered by saying that no country is in credit, which goes to show that debt is everywhere and more debt must be created to service the interest on that debt. Then Joe Schmo has to go out and work his ass off to afford to by useless [LIFTED] he doesn't need, on credit, so that the economy continues to function.

If you have a better answer for the OP, I'm listening. Who's in credit?

Primarily, big business. Was that not implied in Koli's original reply?


I seem to recall that in the olden days, people put their savings into the banks and the banks lent that money to others as an investment. I imagine it hasn't really changed that much.

I doubt very much if Bill Gates keeps his $53 billion in a paper bag. I know that's only a fraction of the UK national debt, but he is just one man. There are a lot of rich people and corporations in the world and they all invest their wealth. Heck, even I lend cash to the UK via my pension scheme, and I expect payment in full with interest when I retire.

...or perhaps I totally misunderstand?

That is not what I am trying to say. I am saying that car mechanics is very unlikely to understand creation of money and money multipliers and it doesn't matter how much youtube he watched. And he certainly proved me right. He hasn't got a clue, just as most people haven't. I haven't got a clue about how to fix a car though...


I have already explained in my first post. Have you not read it or do you not believe what I said?
I am in credit for example. I have savings in a bank, in my pension fund, I own shares, share options and I own foreign currency. I provide capital to those who want it. I lend to governments, banks and corporations. They use that money for whatever they want and they pay me interest and dividends. We are all happy like that...

This is blatant tangent, but that's a massive generalisation (even by my standards, which are awful). And for the twentieth time, I never claimed youtube was the font of all knowledge.



I read your post, but you just explained the system. Quite clearly, sure. But you didn't really answer the question and I posted what I posted as I felt a debate coming. Once again I find myself on the wrong end. You may be happy like that, but billions of people aren't, because they don't have credit to lend to anybody. They struggle to feed their kids, whilst farming food that gets flown out of their country to your local supermarket for you to eat while contemplating your personal wealth.



So who is it? JJ's answered correctly. It's big business. Not any one country. Countries are meaningless to the obscenely rich.

Except that if all the Bill Gates of the world and everybody else who's in "credit" wanted their money in their hands tomorrow and the banks had to give it to them, the entire system would collapse.

I'm not sure that would've been possible in the olden days....

Ok, that is entirely different debate that I refuse to have but I am curious: What you are proposing here, communism as political system or a socialist economy model as in "collective ownership"?
Because I have a first hand experience with both and I know neither of those is not the world needs.

The problem is that the only truly capitalist society is Somalia, every other country is a mixed economy with varying levels of public sector. There are many things that are done considerably better when done by the state. Even the US has to concede that fact.

The problem here is still the same fallacy as before. You are assuming (even if you agree it is not true) that money is a tangible factual object if you are holding it in your hands in the form of say a £10 note, or a gold coin with a picture on it. Whereas money that is in your bank account is somehow a product of fractional interest which makes it an illusion.

But that is an unfair standard. The value of the gold, or the £note is not real, it depends entirely on the willingness of other people to part with their assets in exchange for it. Money is not an object, the gold coin and the £note are just symbols representing value, which is an abstract.

To put it simply, you could argue: IF everyone wanted all their money at once out of their bank accounts, the system would crash THEREFORE the money isn't real enough.

But you would automatically have to accept: IF everybody lost faith in gold as a currency, then that system would crash too THEREFORE no money is real enough.

Alternatively, you can learn to accept that money was designed to be an illusion from day one, and accept that it has been a very useful mechanism to allow various people to exchange the proceeds of their time and effort. But you must never use the suggestion that some money is illusory as a reason for not believing in it.

Likewise, the implicit assumption that only liquid assets should be held by banks (necessary for them to be able to empty out their entire inventory on demand) applies a spurious standard. If the bank lends money to an individual or a business for the purpose of investment, and that money is secured against an object of value (call me crazy, but that's how I tend to think of mortgages working), then the object against which the money is secured is an asset, and I see no reason why they can't enter its value into their balance sheets as such until the loan secured against it is repaid. The fact that sometimes the object turns out to be worth less than initially hoped doesn't undermine the principle, it merely suggests a requirement for better accounting methods.

Either way, if the object in question has monetary value, then its value is as good as money. What it lacks is the convenience of convertibility such that it can be converted into Gold, Euros, a cow or a bacon sandwich at a moment's notice. That only matters in the doomsday scenario you describe. But if we must really insure ourselves against these scenarios where everyone realises that something isn't as real as they ignorantly imagined it to be, then "real" employment will require us to spend all day every day manufacturing an item of direct utility. This would require most of us to be subsistence farmers, as there would be little of value left after your cull beyond beyond food, land, and the weapons that are useful to relieve others of food and land.

You're all correct in what you say.



I'm not proposing anything. Merely saying that the current system is designed to make less than 1% very rich, whilst a large part of the developed world is middle-class and has an iPhone, BMW and mortgage to make them feel like they've got somewhere in life. Then another massive part of the planets population is left to rot and generate wealth for the 1%. In the words of Morpheus (or perhaps Plato before him) I believe it is a prison we cannot taste, or see, or touch.

Marx, amongst many other philosophers and observers, had some fascinating ideas derived from his observations of the world. IMO they were corrupted by men to become communism. That was never going to work, because it contained the same kind of men who are now the 1% and who, above all, desire power. We might as well give them 9 rings and let them have dominion over all life.....

However, look at Cuba. Capitalism has infested the system due largely to tourism. But their healthcare and education are still great. Everybody has vastly subsidised food and they grow 90% of their own fruit and veg. Nowhere is perfect, but they've managed to sustain a different approach to most of the rest of the world for a very long time. Some of it works. Of course, some of it doesn't.



That's an interesting observation, but I don't agree about Somalia being the only "true" capitalist society. For one, you could argue anarchy is not a society. But a certain amount of public sector may well be required in order to keep the market economy moving and prevent the proletariat from revolting (as Marx believed was inevitable). Just throwing it out there.....



You're right, of course. I haven't disagreed with you at all. But originally, everyone in society (and it would've been a small village or group of tribes or whatever) agreed on a value for commodities. Those commodities were exchanged in a way that was recognizably fair by the rest of the people. As soon as "money" was invented, the power for the agreement of value began it's journey away from the people and towards the 1%.

Overall, what I'm trying to say is that the current system is a prison and because most of us are materialistic we allow ourselves to be held captive by this system. For the most part we do not get rich (and yet for many people this is the dream). Most people I know want to own their own home, drive a nice car, be able to go on holiday. Yet the means to do this doesn't depend on how many fish you catch, or how much coal you mine, or in other words, how much genuine commodity-based wealth you generate from the planet. In many cases it depends on what value is placed on your time by the system. Anyone could argue that any "profession" is worth more than another one, but ultimately we accept that doctors are worth more than miners, bankers are worth more than farmers, football players are worth more than the mechanics who keep the nation's vehicles moving.

I don't have a better idea, but clearly the current system is wrong. Unless you're a football player, part of the 1% elite, or in credit......

We need a mixed economy with a public sector for things like defence police fire services etc. I am not in favour of leaving everything else to the market. Private electricity companies have not give us more secure energy supplies. Selling off the R&D divisions of government have not helped our economy. The ideas have been bought by overseas companies generating us no benefit what so ever, apart from a one off gain of selling them. The sale of the railways has not helped that much. It has meant we have a more overcrowded rail stock because it makes no sense to put more carriages on the trains, and fares have outstripped inflation for years. Some things could and should have been privatised but others left well alone. We need a progressive tax regime with permanent bans on tax dodgers ever returning here like the US. If you want to live here pay taxes here, none of this non dom status.