Wednesday, February 04, 2009

A not bad video on Fractional Reserve Banking. Explains things well.

Yeah, it goes a bit conspiracy at the end. But apart from a couple of sentences which send the cringe-alarm off, it mainly makes a lot of sense.

Discussion continues in comments and here.

2 comments:

Oli said...

Thanks for this link. I think it's a fantastically clear explanation of how money came to be defined in the way it is today.

I'm not convinced that an economy with a growing numerical size (as measured by some currency) necessarily has to have a growing ecological footprint.

But it's scary the idea that interest creates a growing pressure on debtors to pay back more money than has been created. I wonder what happens if you write off the debts. If interest payments received covered the debts written off then I guess the system would balance again.

Also, in light of this video I guess you can see the massive bailouts as being as much about the creation of new debt as it is about anything else.

phil jones said...

He he ... yes. Bailouts == creating lots of nice new debt. Which in turn will need the creation of more money and more debt to pay off.