Saturday, December 19, 2009

Money as Debt II

A few years ago I stumbled upon a video on YouTube titled Money as Debt.  The short animated film discusses the problem with building a monetary system comprised primarily of debt issued by private banks.  It is perhaps the best concise explanation of why bad things seemingly keep happening to our economic system.

A few months ago a sequel, Money as Debt II: Promises Unleashed, was released. This new film goes into even more depth than the first and shows how the recent economic crisis is directly related to the structure of our monetary system.

Key points to think about after watching these videos:
  • Money supply is comprised primarily of debt issued by private banks and not newly issued bills by the government, as is commonly believed
  • Ever expanding levels of debt are required to keep the system intact.  A good analogy would be to think of certain sharks, such as Great Whites and Hammerheads, which need to continually swim to breathe.  Now think of our economy as a shark that needs to continue to swim at an ever increasing speed in order to breathe.
  • It is no accident that consumers and the government are encouraged to continually rack up ever increasing levels of debt.  Even a plateau in the debt levels would cause the economy to come crashing down.
  • Eventually, the debt payments will consume such a large part of the economy that it must collapse under its own weight.  Think of it as our shark reaching the point where it is swimming at the speed of light.
The great thing about these videos is that they can help a person who would never read a lengthy economics article understand how our monetary system works.  If you want to reach out to friends and family, this is a good starting point.

Watch part one of Money as Debt:

Watch part one of Money as Debt II: Promises Unleashed:

For better video quality, you can also purchase these videos on DVD from
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