Explanation of a Resource Based Economy (video)

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jneo
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Explanation of a Resource Based Economy (video)
 
For anyone who wants to get a better understanding of a Resource Based Economy and how our 
Monetary system is counterproductive I encourage for you to click on the link and watch.
 
 
It is over an hour, but the information is intense and more valuable than what any of our
politicians would ever have to say.  
 
 
*if for some reason the link won't work, just cut and paste.  
 
 
 
 
http://video.google.com/videoplay?docid=3932487043163636261
 
 
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pleaseremoveme
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Re: Explanation of a Resource Based Economy (video)

Firstly, the movie contains a lot of excess information, which was already presented in the other Zeitgeist movies. Is there no website with a short summary of these ideas? 

Secondly, the resource based economy is an utopia. It would be nice if it could work, but there is absolutely no evidence that it will. The whole movie has 'the seventies' written all over it, and science has moved beyond the naive believes of the hippies. Zeitgeist apparentely has not. I fear that attempts to implement these ideas will be as disastrous as communism.

Lastly, let me point out once again that there are several problems with the populars explainations of how the money system works and how it fails. The observations are correct: currently we either have inflation or recession and often both, along with ever rising levels of debt. But the reason is not that more money needs to be loaned into existence to pay interest: that can be mathematically refuted. The cause of our problems is something else.

 

 

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Re: Explanation of a Resource Based Economy (video)
woupiestek wrote:

Lastly, let me point out once again that there are several problems with the populars explainations of how the money system works and how it fails. The observations are correct: currently we either have inflation or recession and often both, along with ever rising levels of debt. But the reason is not that more money needs to be loaned into existence to pay interest: that can be mathematically refuted. The cause of our problems is something else.

 

I'm new to reviewing this type of information.  Can you expand on what the "something else" is that is the cause of our problems?

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pleaseremoveme
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Re: Explanation of a Resource Based Economy (video)

Well, I'm still not completely sure. But I think there needs to be a balance between asset prices and salaries, since dividends on shares and interests on mortgages ultimately come out of salaries. This balance has been broken by speculation on rising asset prices: banks drive the prices up by flooding those markets with credit, but then have to face either high inflation as salaries increase to compensate, or a lot of defaults as loans cannot be payed back. Now for the past sixty years the government and the central banks have done everything they can to fight the symptoms - high inflation and recession - without ever once doing anything about the cause of the problem. This has allowed the system to become more and more unbalanced, up to the unprecedented and unsustainable levels we have today.

But maybe we are all overlooking something. Maybe the money system doesn't actually function like we are told it does. So the 'something else' might be something I cannot possibly identify right now. I mean: there may be plausible explanations for the irresponsible behaviour of banks throughout history that have nothing to do with speculation on asset prices. The only thing I know for sure is that a debt based money system, as our system is supposed to be, doesn't need to grow exponentially.

 

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Re: Explanation of a Resource Based Economy (video)
 
I will have to disagree.  First off a resource based economy is NO UTOPIA, because there is no such thing.  All systems
emerge and evolve, ex. your 1st computer you buy, you think it's perfect because it just hit the market, but 3 months later a better one emerges.  So again, it's no utopia, just updated.  Secondly, it does not have 70's written all over it.  The new system is all about updating our current system instead of continuing more of the same.   You cannot solve future problems with old systems and value systems.  Just like people who pray, cannot pray over and over to fix problems.  
 
 
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Re: Explanation of a Resource Based Economy (video)
woupistek wrote:

The only thing I know for sure is that a debt based money system, as our system is supposed to be, doesn't need to grow exponentially.

Woupistek,

As you and I and others have discussed in other forms, and people much smarter than I have proven, a debt-based system does not require exponential growth, but it certainly behaves like it does.

I think the problem is not that our system requires it (because it doesn't), but that it allows it.  When the only "brakes" on that growth are to be applied by politicians and/or bankers, that's worse than asking a 5 year-old to guard the candy-store. 

That's why I am still convinced that the solution is a money system whose growth is attached directly to the growth of the economy, i.e., a commodity-based currency, most likely gold.  Also, the same laws that apply to other assets need to apply to bank reserves. meaning that the allowance of double-claims on deposits and the fractional reserve banking practices that accompany it, has to be outlawed.

 

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Re: Explanation of a Resource Based Economy (video)

JK121

In the circular cities in the video people would live in a green zone outside of the city. In the seventies that concept has been tried in Amsterdam (in the Netherlands) with the Bijlmermeer. That wasn't a succes. The suburb it now a place where we dump immigrants, because we can get no-one else to live there anymore.

I think the possibility of technological innovation are greatly overestimated. And this is also typical of the seventies: in those days my father was told that we would be travelling to the stars by now. Of course we would, because people had already been to the moon hadn't they? And it hasn't happen yet. And may be our monetary system slow the development down, but how can we ever be sure that that's the most important limitation?

Finally the notion that nurture is more important then nature was a widely held believe in the seventies. Again in the seventies here in the Netherlands, professor Buikhuisen wanted to investigate genetic causes of criminal behavior. He was practically banned from our country for this heresy. But over time acceptance of his ideas has grown in the scientific community, because reality shows us that nurture isn't everything.

Zeitgeist doesn't come with a revolutionary new idea, but with an at least forty year old one. And it is utopia.

 

Patrik,

The Roman Empire had commodity currency, and still experienced inflation: the coins would progressively be made out of less or cheaper metal. Inflation is so favorable to those in power, that I'm very pessimistic about anything that is supposed to stop it. But I agree that the reason for the explosive growth of debts is a result of mismanagement by politicians and bankers.

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Re: Explanation of a Resource Based Economy (video)
 
Well I see where you are coming from, but it's 2009 and the state of technology is much greater and peoples mental abilities
are too.  This idea could not work in the 70's.  I think we could be taking steps in order to achieve it.  For example, start investing in tidal, wave, geothermal for the energy sector.  This idea would be emerging and not instant.  If the money/political system does fail one day an alternative must be looked at.  I mean seriously, why not update our system so that no one has to worry about losing his/her job, recessions, depressions, stock market crashes, small crimes, corruption, and so on.  IF we continue to repeat the same cycle over and over again of a  money system were just going get more of the same.  As for getting back on a gold standard, it could happen but look at history and the goldsmith story and how that worked out.  Not gonna work.  It will take time but it is possible.  Like the video said "WE HAVE TO".  Cause I think we will all dread the day of DIGITAL MONEY.  
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Re: Explanation of a Resource Based Economy (video)

[quote=The Roman Empire had commodity currency, and still experienced
inflation: the coins would progressively be made out of less or cheaper
metal. Inflation is so favorable to those in power, that I'm very
pessimistic about anything that is supposed to stop it. But I agree
that the reason for the explosive growth of debts is a result of
mismanagement by politicians and bankers.

Woupie,

Yes, the Romans and the Byzantine's had a gold-based currency, and both suffered dilution from the government.  I agree it's not perfect, but it is a lot harder for the government to round up all the coins in circulation, and re-mint them with less metal content, than it is to just turn on the printing presses or create digital money by punching keys on a keyboard.  It's not only more difficult physically, but also politically.  Whereas people seem to accept inflation, outright re-minting and release of smaller coins would be sure to raise more eyebrows than the current system.

Also, the Romans and Byzantines were cornered into doing this by their own imperialist policies.  Their empires grew too large, and the need to dilute the money supply stemmed from their need to maintain ever-larger and evermore spread-out armies in distant lands.  I wonder what would have happened if they had not embarked on these expansionist campaigns?

The US founders were very familiar with the dangers of fiat currency, because of their experience with it prior to the Revolutionary War. So, they forbade the government from printing any money not based on precious metals.  Unfortunately, they did not foresee how clever future legislatures could get.  The government still does not print fiat money.  Technically, it's the Fed, which is not an arm of government, but a cartel authorized to operate as a monopoly, licensed by the government.

I guess that helps prove your point:   "Inflation is so favorable to those in power, that I'm very
pessimistic about anything that is supposed to stop it."

I do see a glimmer of hope:  private gold-money accounts.  By this, I am referring to goldmoney.com and bullionvault.com  Both private outfits allow clients to connect a bank account with a gold account in one of their vaults.  Once your account is connected, you can buy or sell gold bullion (stored in their vaults in Zurich, London, or NY) anytime you want, often to/from other account holders.  What this does is provide an easy way for anyone to safeguard their fiat money in gold whenever they want, to sell some when they need cash to pay bills in the fiat world, or buy some when they want to safeguard fiat money savings.  Evetually, I forsee the ability of gold-owners in these systems to be able to lease their gold, and thereby earn some interest - finally laying to rest the criticism that gold pays no interest.  

In these systems, all your money (or however much you use to buy gold) is backed by gold.  They charge a small fee for storage, insurance, and for providing the trading platform under which this works.  Accounts of as small as one ounce of gold can be opened (and I think smaller - as little as a gram).

I do not personally have an account with either of these companies yet, but that's mainly because their overseas account rules are too strict for me at the moment.  As soon as they make them equal to US or European standards, I'll be seriosuly considering it.

Cheers,

Patrick

 

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Re: Explanation of a Resource Based Economy (video)

Patrick Brown said - As you and I and others have discussed in other forms, and people much smarter than I have proven, a debt-based system does not require exponential growth, but it certainly behaves like it does.

The subtle but important difference is that a debt based system that charges interest MUST grow perpetually (the multiplication of interest debt) - the interest payments are never funded or issued, they must be taken from the future circulation.  Eliminate the interest charges and you eliminate the need for perpetual growth.

Larry

 

 

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Re: Explanation of a Resource Based Economy (video)
Larry wrote:

The subtle but important difference is that a debt based system that charges interest
MUST grow perpetually (the multiplication of interest debt) - the
interest payments are never funded or issued, they must be taken from
the future circulation.  Eliminate the interest charges and you
eliminate the need for perpetual growth.

Larry, please see: http://www.peakprosperity.com/forum/fatal-flaw-logic-crash-course/12557

for an in-depth discussion of this topic.    Having been somebody who believed a debt-based economy requires a perpetual increase in the money supply before having debated the issue extensively with the generous help of Fujisan, I seriously recommend it.

The bottom line is, a debt-based monetary system does not require perpetual expansion, but perpetual expansion is a fixed feature of all debt-based systems. 

I do not think it is helpful to recreate the debate here, because it is all in that thread, but basically, interest payments are re-circulated into the economy via bank expenses, government expenses (because Fed profits go to the Treasury), investments, and other loans.  Therefore, perpetual growth is not required, it is merely a characteristic. That is, it is possible, though highly unlikely, for a debt-based currency to exist without increasing the money supply.  The interest on previously existing debt can be proven to be re-circulated into the economy via previous interest payments.

That being said, I cringe at the name of the above-referenced thread.  It was not named to take a swipe at the Crash Course (in my opinion, but I cannot crawl into the mind of DS, who started the thread).  It was just one of those dicussions that went deeper and deeper, but I think in the end, some truth was discovered. 

 

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