The American Dream?
Last Post 26 Apr 2012 11:11 AM by 2nd Man. 23 Replies.
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Megiddo

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    09 Jan 2011 05:06 AM


    GREAT Movie.

    That's where your money's at.

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    2nd Man
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    09 Jan 2011 10:51 AM
    As a student of economics, let me put you straight on this. I've seen to many of these videos that're are aimed at scaremongering. It's worse then the lluminati videos. It sickens me that 40k have watched that and probably believed every word.

    I'll try and keep it a bit theory free, but debt is just a ford intertemporal substitution, you substitute the money you have in the future for a lump sum of money now. The other main form is saving, you give up money you have now so you can have more money in the future. Taking on debt means you value the smaller amount of money now more than the larger amount in the future (as your paying interest). Debt has a negative connotation but it's damn useful, what you gonna do without a mortgage? Save up for 30 years whilst living in your Mum's basement? Debt as a concept isn't bad in anyway, though it's been portrayed as such (largely due to Christianity calling it a sin, that didn't help).

    Some of the stuff is just plain wrong though, the fed ain't dumping money in the bank for them to give out, and banks aren't completely reckless in loaning out money (they want it back afterall). The sub-prime crisis did happen because banks started offering loans to those that have had them otherwise, but the problem of leverage ratios is too complicated to understand.

    The other thing that irks me here is that the video wants you to put 100% of the responsibility on the banks, as sure as they offered cheap loans people took them up. If your taking on a loan that you can't afford, then that's your responsibility, no-one was complaining when they got the new car they wanted.

    Now onto the fed, yes I've only got that far. I've got no idea what the whole thing about it being a private bank is that no-one has access to, I think it is technically quasi-independent, at least the Bank of England is. It means that they have to answer to the government in power but the government has no control on them (and so can't go mad printing money etc. it's a pretty smart mechanism). And private banks cannot ask the fed for money, the fed bailed them out, and that involved buying assets. But the alternative was to let them go bust, you lose your life savings, the banking system collapses and the economy sinks to a level deeper than you can imagine.

    Next, the mechanics. The fed does not ring up the mint asking for more money to be printed. Cash and coins account for a very small percentage of money (think about it, you may have a house worth $200k, $2k in savings a $20k car and some other stuff, but only $20 in your pocket at any one time). The fed creates it digitally, it sounds even more messed up, but it's just created on a computer and that materialises itself into accounts.

    Not sure what they're talking about with the fed lending the govt. money, the govt. get's it's debt from the public in form of bonds. The owner of USAs debt is largely the public in a roundabout form.

    The inflation bit was spot on, they exagerated it just a little though. Zimbabwe was adding zeros onto it's prices, at the moment you can expect to add on about 1 or 2 cents to that dollar. Inflation has some positive effects as well, it reduces the real amount you have to repay on your loan. Say you took a loan for $1k, and a T-shirt costs $20, that's 50 Tees. You repay the loan in 10 years time when Tees now cost $25 (solely because of inflation), that's only 40 Tees. Your paying a lower real amount back. So anyone with debt is benefited slightly by inflation, it's why the fed isn't too worried about increasing the money supply too much right now.

    A run on the bank can occur, banks loan out more than they take in deposits, but as long as there isn't a run on the bank there's no problem. The issue that arose in the run up to 2008 was that banks were offering a stupid ratio (the leverage ratio), they we're giving out too many loans per deposit if you will. In fact, central banks like the Fed exist to ensure a bank run doesn't happen, they're a lender of last resort meaning if everyone did want their money at the same time and the bank couldn't provide it, the fed would. This video seems to have got itself a little 'mixed up' on that.

    I'm gonna stop now, I'm halfway through the video and hope I've demonstrated enough to you to ignore anything and everything you learn from this video. If you really wanna learn about the banking system and monetary economics then I can recommend you some books, but please stay away from youtube.

    I realise this is a long post, but I hope if you took the time to watch 30minutes of propaganda then you'd take 30 minutes to learn the reality.
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    2nd Man
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    09 Jan 2011 10:59 AM
    I actually watched on a bit and pulled this line

    "You are no richer than you were in 1955"

    That is absolute grade A BULLSHIT, real GDP per capita is roughly three times higher now than in 1955. That means that the average person is 3 times richer, they can buy 3 times as much stuff as they could in 1955.

    The video started out as putting a massive spin on it, by this point it's descended into making stuff up, it really has.
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    12-Bit-Bash

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    09 Jan 2011 01:55 PM
    This video reminded me of the film called America: Freedom to Fascism by Aaron Russo.

    If you're interested in this kind of thing you should check it out.

    2nd Man seeing as you're interested in economics I don't suppose you heard this programme on Radio 4 - The Great Hargeisa Goat Bubble
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    TooIntegrated
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    09 Jan 2011 02:21 PM
    I agree with everything 2nd man said..

    The movie was still entertaining tho.. hahaahha.. I had a good laugh.. but the message is severely flawed..
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    2nd Man
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    13 Jan 2011 12:01 PM
    Thanks Bash, never had you down as a Radio 4 listener though!

    Megiddo, you know I'm not attacking you right? It's just this is my life, it's what I've spent years studying, so when you see a 30 minute video purporting to teach you economics when in fact it is subtle indoctrination of a bizarre mix republican, conservative, Christian, anti-illumanati view, you tend to get kinda mad.
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    Megiddo

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    14 Jan 2011 12:21 PM
    Yep, I know, I got no problem with your reply (I didn't read it all, no one did LOL) but yeah, the truth is somewhere in between, I guess some things said in the video are true or at least partly true.

    I've started working with banks since I've started selling beats (and just making money on the net, really) and I've already made a complaint to the bank which my card belongs to. I've waited about 3 weeks for a paypal payment and it arrived only after I made my complaint. Coincidence?

     

    Oh, and about that thing being richer now rather than 1955, I know you think it's bullshit, maybe in your country it is bullshit, but for example my country is doing worse and worse since like... the 40s-50s. It's partly the regime, partly the corruption, partly the poor management of resources. (paradoxically, my country is quite rich in natural resources, or better to say, it was until the germans and all that exploited them during the 2nd WW)

    So yeah, to give an example, you had like 10 lei back then. Now you have like 30 lei.

    But back then, a bread was like 1 leu and now it's like 2-2,5 and it's smaller, maybe half of the first one.

    Where's the gain here?

    And our VAT here is 24% right now. Only Sweden has a higher one (25%) from the EU.

    But do our incomes compare to Swedish people's?

    For example, my mom work at the local Council as a social worker or how do you call it. She gets a little less than 200 Euro per month, 8 hours a day. A friend of mine worked in Austria at a grapevine 10 hours a day and got like 1300 Euro per month.

    BUT the prices are the same. Oh wait, in my country they're bigger.

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    2nd Man
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    14 Jan 2011 02:15 PM
    Partly true maybe, but any propaganda or spin needs to be based on something.

    As I say I was attacking the video, which was American and claiming that Americans were no better off.

    However, whilst Romania did take a few steps back during WWII, since then they've done nothing but grown, GDP pc in 1950 was $2500 (real dollars, I can explain it if you want) and it''s currently around $13,000. So if you want to talk about how quickly the country has grown, Romania has grown fair quicker and it's income is far larger now relative to 1950 than the USA and UK are now relative to their 1950s levels.

    In terms of Romania's future as well, as part of the EU you should (and are) catching up fast. I won't explain the economic theory, but poor countries tend to catch up quickly with the richer ones, Romanias was averaging about 7% growth a year pre-2008, which means in just 10 years real income (the amount of goods you can buy will double). When you join the Euro you should see more stability as well, especially in inflation.

    And the VAT rate is irrelevant of incomes, most EU countries have a rate between 20%-25%, it's a tax on consumption and it's a percentage of income that is taxed, so it's independent of earnings.

    I can't comment on your personal situation, but what I'm discussing here is the economy as a whole.

    And you better have read all of this post because I gave up valuable revision time typing it!
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    12-Bit-Bash

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    15 Jan 2011 03:58 PM
    Thanks Bash, never had you down as a Radio 4 listener though!
    By 2nd Man .

    Once again I live up to my reputation of being a man of mystery and intrigue !!!!!
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    Br0
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    18 Jan 2011 06:21 AM
    2nd dropped the bomb on this one,agreed!
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    SIRLAZZZY

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    19 Jan 2011 11:46 AM
    2 reallll questions err one is askin them selves

    1st q...how u get a 30 mins utube vid
    2nd q...is that mr t narating haa

    but yeah ...i agree with 2nd man...
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    nilen654

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    19 Dec 2011 09:47 PM
    Awesome movie this is, I have watched it online, Its worth to watch this one,
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    sunnyshampz

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    30 Dec 2011 03:24 AM
    information and education is priceless.... i wish i had the knowledge 2nd man has about economics, but i dont. i suddenly feel the need to trade in my fake digital money for real things.... like property and food and tanglible things...

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    werm

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    22 Apr 2012 12:39 PM
    The movie is real talk. You either think the glass is half empty or half full. My granddad used to say, "you don't need to worry about the good, the good takes care of itself..." I won't say the theories are spot on, they are not. But, back in the sixties you cold buy a brand new Ferrari for $10,000. Inflation has all but destroyed American purchasing power. A dollar was a whole lot more valuable in 1950, as far as what it could purchase in goods, than it is today. More people had land and homes, per capita too! Most Americans are "in possession" of stuff. Most have little savings and almost all are in debt. Does that spell the end of the world as we know it? Who knows? Should that alarm most people? You decide. Just because the ideas in the movie are off, doesn't mean people's fears about their financial security should be ignored. The western world is in deeper debt than the amount of minted currency in circulation. That's ill. No matter how you flip the coin.
    But I am a worm, and no man; a reproach of men, and despised of the people. --Psalm 22:6
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    werm

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    22 Apr 2012 12:53 PM
    One trillion dollars is like $1000 PER SECOND from Moses' Day to now. The media reports that the US is anywhere from 16 to 80 TRILLION dollars in debt. If you sold everything in this country at market value it wouldn't pay off 80 trillion dollars! Of course, on the other hand, we could grow the economy an offset some of the debt. But, as it stands, yes, we're in trouble. How much trouble? For how long? Don't know the answer to that. But, yes, our (the west) financial situation is grave to say the least. But, it's not totally the fault of banks. Banks didn't force people to take on as much debt as we did, but they do have their part in this mess. So did people who bought stuff on debt they had ZERO intention and ability to pay off. There's plenty of blame to go around here.
    But I am a worm, and no man; a reproach of men, and despised of the people. --Psalm 22:6
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    werm

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    22 Apr 2012 01:04 PM
    BTW--For anyone interested in checking the math, Moses is said to have lived at around 1393 BCE. One.
    But I am a worm, and no man; a reproach of men, and despised of the people. --Psalm 22:6
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    2nd Man
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    23 Apr 2012 12:43 AM
    It doesn't matter that the value of the dollar has been destroyed. A Ferrari may cost 10x more, but your paycheck is 10x that. If I went round and put a zero on every price, including wages, would it make any difference? The dollar would be worth a 1/10th of what it was, but it makes no real difference.

    Money is just a measuring stick in that sense, like an inch for length, it's a dollar for value, the difference is that we can change the dollar but not the length. But changing an inch does not change the length of something being measured! Same with the dollar, changing it's value doesn't change the value of what you buy with it.

    Just wanted to make that point on inflation, a lot of non-economists get caught up in it where it's not really a big problem. You make some excellent points in the second post though
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    JB Production

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    23 Apr 2012 03:31 AM
    "changing it's value doesn't change the value of what you buy with it. "

    it does if you buy in another country, for example when the dollar is high, here in croatia i have more money, cause for example 25$ used to be 130kn and now its 145...so if a bread is 5kn now i can buy 3 more breads here even thou i sold the same amount of beats in dollars

    i probably missed the topic a bit

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    werm

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    24 Apr 2012 05:39 PM
    I'm not so sure the inflatation has been linear, in the sense of just adding zeroes to the end of our prices. We're poorer, in the context of purchasing power. Incomes have NOT kept pace with inflation. At least not with everything. Anything that had/has metal in it has cheaper, lower quality/quantity metals today than it would, say 10yrs ago. Think of lawn mowers or kitchen appliances. They haven't changed much in price, but they have changed considerably in the durability of materials used. Still, one caveat is that for whatever value given to US (western) currency, it IS (or, rather, was) more widely available today than it has been historically. In other words, according to "www.measuringworth.com" a dollar from 1955 would purchase about $8.40 worth of goods in today's dollars...but, fewer people had access to that currency in 1955.
    But I am a worm, and no man; a reproach of men, and despised of the people. --Psalm 22:6
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    werm

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    24 Apr 2012 05:55 PM
    Also, If I'm not mistaken, Christianity's hang up was more with usury (excessive interest) than with debt. However, from the standpoint of "tomorrow is not promised to you", debt IS somewhat considered a hazardous situation. But, I agree, wholeheartedly that debt in and of itself ISN'T bad. It's necessary. But, excessive debt (more than can reasonably be expected to be paid back) IS not wise at all. And I think the "western problem" hinges on this concept. Far too much excessive debt, in a nutshell. One.
    But I am a worm, and no man; a reproach of men, and despised of the people. --Psalm 22:6
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