10 Year Old Explains The Truth About Where Money Comes From

Giraffe

Member
Joined
Jun 20, 2015
Messages
3,730
Yes.

5 reasons why there is something wrong with it.

1. Their obligations are not settled in full due to the two tier Banking system ( hence fractional reserve Banking )
2. Debt assets grow exponentially while obligations are static
3. Losses are heavily socialized
4. They are able to direct markets by being the main headwater for Money allocation, whereas non-Banks are limited by Capital they actually have.
5. Bank "credit" is insured by the Government and denoted as legal tender so it's Money and not just credit.

None of this generally applies to a normal company with some exceptions in the case of point #3 when there are bailouts of large companies.
Accounting principles (such as US-GAAP) are subject to legislation, and some of these principles may be dodgy. Double-entry bookkeeping is a method, a tool. It allows you to organize your data in a way that you get the information you need.
 
Last edited:
OP
michael94

michael94

Member
Joined
Oct 11, 2015
Messages
2,419
Accounting principles (such as US-GAAP) are subject to legislation, and some of these principles may be dodgy. Double-entry bookkeeping is a method, a tool. It allows you to organize your data in a way that you get the information you need.
Giraffe, you are not wrong but I think you are losing sight of the big picture. It is a bit of a strawman that you are choosing to explain that double entry bookkeeping is just a "tool" while glossing over the context I gave above for why Banks controlling our money supply is Parasitic and Rent-Seeking.
 

Giraffe

Member
Joined
Jun 20, 2015
Messages
3,730
Giraffe, you are not wrong but I think you are losing sight of the big picture. It is a bit of a strawman that you are choosing to explain that double entry bookkeeping is just a "tool" while glossing over the context I gave above for why Banks controlling our money supply is Parasitic and Rent-Seeking.
I think you misunderstood my first post. I have not discussed the flaws in the banking system at all. No strawman here. It's the GAAP (generally accepted accounting principles) what you are talking about.
 
OP
michael94

michael94

Member
Joined
Oct 11, 2015
Messages
2,419
I think you misunderstood my first post. I have not discussed the flaws in the banking system at all. No strawman here. It's the GAAP (generally accepted accounting principles) what you are talking about.
@tankasnowgod was just offering additional explanation of how the situation works.

It is a strawman to assume we were discussing the double ledger system as if that tool is a fundamental accounting problem. It is the double ledger's use and context which we have identified as the Gordian Knot.
 

Giraffe

Member
Joined
Jun 20, 2015
Messages
3,730
@tankasnowgod was just offering additional explanation of how the situation works.

It is a strawman to assume we were discussing the double ledger system as if that tool is a fundamental accounting problem. It is the double ledger's use and context which we have identified as the Gordian Knot.
I have no clue what you are trying to say, and I have said what I wanted to say.
 
Back
Top Bottom