Wobbles,
I am on my byte limit so I won't play that video.
The problem with interest payments is that they can only be paid if
there is growth and it is growth that in the present system is
imperative. If it is not there everything falls over.

Most money theory works on the principle of growth and takes no
account of energy. Economists think growth depends on money supply but
they are wrong, it depends entirely on energy.
The banks generate phantom money in the hope that commercial activity
will generate growth which will give that money reality.
The interest becomes a feed of real money from growth.

Energy supply is becoming limited so growth will be limited.
If energy supply falls then negative growth is a certainty.
There will be some fiddling at the edges by using energy more
efficiently, but ultimately it will exert its relentless oppression.
Some money is lost just like in the laws of thermodynamics, it
disappears into a black hole, that is known as overheads.

Anyway thats how I see it, and while the unreality of money can be
seen everywhere, never the less some of it is real.

Well all I know is that some eight years ago a common block of land fetched around $30K in my area, whereas today they sell for around the $200K mark.

Now I know there have been increases in the production costs associated with land development but knowone really knows just what the true value of common land is today. That is land without any views etc.

Now the real problem is that many folk have borrowed on that 'top end value' and may well be in dire straights if and when the values fall.

So in essence I guess there is no money missing as it is quite simply a 'percived value'.

The best place to see changing values has to be the Share Market.

How can a Company - without doing a thing - be worth more in the afternoon than it was worth in the morning and then be worth even less the following day?

Thanks for the link wobbles. I've seen many similar references that all tell the same story. I also like the way the US government creates money - by "borrowing it" from the Federal Reserve but somehow they never seem to pay it back. It just goes to show how phoney monetarism really is.

The world has been running on credit for decades but under the illusion it was all amazing, limitless economic growth.

I am finding it hard to understand why so very well educated people are not understanding the real issue here.
Yes phantom money has always been used, banks lending money that does not exist.
But the wealth exists, so too the debt.
In fact credit is the fuel for our very way of life, surely we understand it alone drives growth?
In the case of those factory share prices, those who bought at the high price must have seen growth and profit in doing so.
Those who sold at the lower price may have seen risk, some won some lost real wealth.
Paper only or is money wealth?
It just like the phantom money has real value and my $100.000 profit not taken by selling my house is real loss.
The money lost in my superannuation is real loss.
But some lost far more.
Some are yet to understand their loss.
And we all will see some reality in the coming 2 years as over priced housing brings reality closer to us all.
Without the international actions taken so far the world would be deep in a very real very long depression right now.
We may yet not be safe from just that.

Ok Belly, I'll explain it how I see it, rightly or wrongly :)

I see money as just another commodity. Now take your house.
When there was heaps of money around, easily borrowed etc,
people bid up the price of houses. When there is less money
around, credit is harder to come by etc, loans are called
in on those who have overborrowed, the price of houses will
come down.

But, you still have the same house that you had before.

As you measure your wealth in $, you think that you have
lost, but your house has not changed, the value of money
has simply changed.

Thats going to be the problem with other assets too, for
nearly all depended on credit for their valuations. Now
that credit is being limited, many of those $ values will
fall. People borrowed money to buy shares etc, that drove
the market up. Those people have lost heaps, forced to
sell in a declining market, as the banks called in their
margin loans.

Once again yabby I agree with every word, I believe I have an understanding of the issues.
But had I sold the house my $100.000 would be real gain, it could have bought my dream, 4x4 and around Aussie beach fishing.
The new owners loss would be as real.
I know people who did borrow to buy shares, lunatics told them in seminars they paid to attend to do it, a month before the crash started.
My question about the money still stands, some never existed but the debt still does and for some the profits.
Todays Sydney press talked of much poorer millionaires, one lost over 2 billion three others over one billion.
It is gone, the deck of cards fell, no return to the highs is going to be seem for decades.
Yet those with cash and courage can win big in the share market as share once sold for 100,s now sell for$20 and one day not far down the track will sell for $45.
Not for a very long time$100.
My house is not cash, it is just want I wanted it to be my home.
But it feels good to own it and owe nothing so very many are in deeper than they can afford.
Not at all happy to say it will get worse before it gets better but that is fact.