I agree with Ed. In effect money is created by the banking systme (based on reserve ratios, etc.) But I have always liked the following definition of money: Money is what money does. (In this way money is like information) arthur
________________________________ From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ed Weick Sent: Thursday, August 16, 2007 11:25 AM To: [EMAIL PROTECTED] Cc: futurework Subject: Re: [Ottawadissenters] Money as Debt The following are my comments on Paul Grignon's Money as Debt, http://tinyurl.com/2uoexg <http://tinyurl.com/2uoexg> . You might want to view the video before reading the comments. But be warned, it takes about 45 minutes. What I felt about the video is that it oversimplifies. As well as being debt when issued to a borrower by a bank, it is a medium of exchange. I bought an ice-cream cone the other day. It was a very simple transaction, but it would have been immensely complicated if I had no money with me and had to find something tangible to give the vendor. Better to go to my wallet, pull out a little fiat money, receive both the cone and a little certificate that says I'm now the cone's owner, and walk away and enjoy the ice-cream. A point that the video does not make, but should, is that there are good banking systems and bad (or not so good) banking systems, and there are governments that are able of enforce sound banking and governments that either cannot or may not want to. While nothing is ever perfect, I'm glad that I can access the Canadian banking system and not the Zimbabwean banking system. When I was in Russia in 1995, the banking system and everything else was in chaos. The ruble had fallen from parity with the US$ to 500 rubles to the $. This is not to say that the value of the Canadian $ hasn't changed. It has, but slowly enough to permit most people to adjust. When I was a student back in the 1950s I spent my summers working on the log booms on the BC coast. I was a top rate boom man, earning $2.12 an hour!! If I were a boom man now, my union would have ensured that I would be getting many times that amount. However, $2.12 was good enough in the 1950s. It enabled me to earn enough money to pay for my tuition, room and board and beer back then. What I'm arguing is that a modern economy, to thrive, requires a soundly administered banking system based on fiat money. It is far to complex and diverse to rely on digging up gold, on LETS or on single source money such as government expenditures. And yes, there will be abuses but we have to live with them. IMHO, people aren't moral by nature. They're moral only if they have to be. Getting back to Moscow in the 1990s, the place was in chaos because the rules under which people had lived for some six or seven decades had fallen away. People like the nomenklatura and the oligarchs got very rich; everybody else got very poor. What Putin and his ex-KGB associates have done is imposed new rules, step by step. The video, via some of the quotes it uses, suggests a conspiracy involving bankers, politicians and others in a position of power. Well, yes, that is likely the case. Wherever there are gains to be made and advantages to be taken, conspiratorial relations develop. I've just read John Perkin's "Confessions of an Economic Hit Man" which documents quite a few of them (truthfully, I hope). So what. We live with, and try to improve, whatever we've got. And when it comes to the monetary system, I would far rather have ours than Zimbabwe's. 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