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What Is Fiat Money?

Ever wonder how the rich get richer and the poor get poorer?

submitted by: Pooptart19
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What Is Fiat Money?. Ever wonder how the rich get richer and the poor get poorer?
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Hits: 13305 | Favorites: 6 | Emailed: 2 | Rating: 3.5 | Category: News & Politics | Date: 09/26/2011
 
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obhwfgirl
Female, 18-29, Western US
 584 Posts
Wednesday, September 28, 2011 11:03:17 PM
This video sees the big picture but is putting the puzzle pieces together incorrectly. Banks don't just poof and make money. There are accounting laws that prevent you from just changing digits.

Banks don`t really "make" money at all. Investment and production do. Take the housing market, banks were capitalizing on the increased demand of a tangible product (houses). As demand rises, so does price and perceived value. As value rises so does wealth. That wealth spread to every level -- rich and poor. The problem is when the supply becomes higher than the demand and the price/value drops for the product.

The main problem with this speculative system is the fact that wealth is not standardized to any tangible supply of anything (although some would argue the closest is oil). It`s dependent upon the perceived value and credit.

The gap is widening because it`s faster and easier to make money with investment than actual wages.

M_Archer
Male, 18-29, Canada
 529 Posts
Wednesday, September 28, 2011 12:53:51 PM
@WobxFobxdobx: Wrong. The Federal Reserve inflated the currency and made people think that their assets (and their wealth) was worth more than it really was. That's why the 20s "roared"; people thought they were rich, due to inflation. They looked at their stocks going up and thought "oh, I`m getting rich!" when the prices were just reflecting inflation caused by the Federal Reserve injecting money into the system. The Smoot-Hawley Tariff Act is what finally put us into the depression.

All of this wouldn`t have happened had the state and economics been separate (like how the state and church are separate).

When the free market fails because of statist government policies, the statists insist that the free market failed and more controls are necessary. Despite the fact that the Great Depression was caused by government controls, the statists use red herrings in order to blame it on the free market.

Crabes
Male, 30-39, Canada
 1049 Posts
Wednesday, September 28, 2011 11:09:33 AM
@strivejaylen they give you what they have in stock and the fed print it and eventually come back in the bank. If everybody keep their money at home then its gonna be a big problem

mcboozerilla
Male, 30-39, Europe
 649 Posts
Tuesday, September 27, 2011 10:54:19 PM
Is this more Ron Paul crazy?

strivejaylen
Male, 18-29, Southern US
 196 Posts
Tuesday, September 27, 2011 7:47:36 PM
so by what i see as the statement"banks print money" - bank of america, regions, bank of putnam county, first national bank and so all never have money from 1. deposits 2. stocks, 3. investors
and they all just make up numbers to give you, and if you ask it in cash they go to the back of the bank and print them off
and no way they can have 200 in there bank from the three things and loan 180 dollars at 10 percent interest per month so when you pay it off they now have 218 dollars.

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