You can create money but you need something to back it like gold, silver or platinum, for example the Liberty dollars. And the you is also part of the bank because there are create by human beings.

no, you don't need to back it with shiny metals per se. If we lived on a fruitful island with no such materials, should we all starve just because of that? No, we all can work, so we could set up a book keeping system to trade our goods and services using any arbitrary unit of exchange we all agree on. Many LETS and time banking systems work like that. They also create money out of thin air. The problem, as with most things, is scale. We trust banks with these services on a large scale, and there are middlemen who profit from the complexity. Inherently valuable and fungible goods like those shiny metals are trustless in that they require no intermediaries in exchange, so they help to alleviate some of these complexities, but that's all there is to it really.

The Truth About Money

Barter

Money begins with the idea of barter

"I will give you this, if you give me that"
Or
"If you do this for me, I will do that for you"

Favour – Quid pro quo – give and take – Tit for tat – you scratch my back, and i'll scratch yours.

I will do that favour for you, if you do this favour for me.

Barter is a voluntary exchange of favours.

A Contract

A contract becomes necessary when a favour cannot be immediately returned.

I will do this favour for you now, but i do not need a return favour at this point in time, you will have to owe me a favour.

Contract - "I promise to repay the favour at a later date"

Means of exchange

A means of exchange becomes necessary when it is not possible to return a favour directly.

I will do this favour for you, if you repay the favour i owe another person.

A means of exchanging favours becomes necessary.

A very short, and to the point, history of money

It is said that money became necessary because it was too clumsy to exchange say, a horse for six pair of shoes. This is rubbish. Here is the truth that they do not want you to know.

Money became necessary in order for the rulers to take a percentage of your work for their own pleasure.

Ask yourself, what is the easiest way for a ruler to take from you. Collect part of your animals and livestock or invent money and take that from you. Which is the easiest for the ruler?

Just think, in order for the king to enjoy his lifestyle, and pay for his armies to protect him, he has to rob you. Money makes this theft nice and easy.

To make the rulers look good, and prevent the people from revolting, they give a very small percentage to the poor and needy. Just like a religion the ruler can claim to be doing good with your money.

Recording favours owed (debts)

When a favour cannot be immediately repaid it is said that “a debt exists”. The receiver owes the giver.

A means of recording this debt becomes necessary.

As favours can vary significantly, the record also needs to include a measure of the favour owed.

And finally the majority of the people had to agree to honour this recording system.

Means of recording favours owed (debts)

Over the centuries many things have been used to record these debts

Shells – each shell represents a unit of favour to be collected
Tobacco – each ounce represents a unit of favour to be collected

Gold is a different category and will be dealt with later

Money & Banking

Money then is a record of favours earned.

This begs the question “Why are banks permitted to create favours (money) for themselves, from nothing?”

When we build up debt, with created money, we are building up more and more favours that have not been earned.

When one generation creates and enjoys the benefits of unearned favours it is the next generation that bears the cost.

One generation has all the fun while the next, younger generation, has to suffer.

The Modern Economy

Having explained above about how money is a record of favours earned. We can now throw that all away because the modern economy has badly abused money and made it unrecognizable.

Gold

Gold is no better than a Fiat currency, in fact it is probably worse because of it’s storage and other problems.

If the people refuse to recognize and accept a Fiat currency you are left with worthless paper.

If the people refuse to recognize and accept gold what are you left with. Heavy bars of jewellery.

There is a problem with your thesis about the creation of money.

First there were monkeys playing with stones then barter until they started minting coins of a valuable metal (gold). Societies were based on a solid pyramidal structure in which slaves were the basic means of production.

The elites discovered a better method of slavery, serfdom in which 60% or more of the goods produced went to the lord's hand who also owned the land and the lives of his subjects by god's will.

But the merchant and the skilled class demanded more freedom, more money and more power. They used the serfs to achieve those ambitions, the contract appears as mean to equal the balance of power between the nobility and the new richs (The bourgeoisie).

And the serfs? Since they were stupid enough to be influenced by the bourgeoisie and the decadent nobility, their situation didn't change until the 18th century when the proletariat start talking about labour rights.

And banks? Banks exist since the 15th century, a merchant giving money to a noble who need it for wars, new castles and more slaves and since usury wasn't illegal... Oh danm, bankrupt was more common than in this era.

Banks get money from deposits of its clients which are only used for loans and shares in the stock market. Banks can easily get bankrupt when the price of shares go down because the amount of money the bank lose in the stocks is quite superior than the deposits it has, ex: Deutsche Bank, Morgan and many others. On the other hand, a bank or a company can get a billion or a trillion if the stocks are in a good mood. Is a matter of speculation.

If you don't like banks and the current financial system, don't open a bank account and save your money in a piggy but thiefs will know about it and you won't get the benefits from annual interest rates.

When you say ''we build up debt'', you are talking about a group, society if i am not wrong, but since individualism is increasing the phrase would change into ''The state is building debt because the goverment is corrupted and the taxes are high, I want less taxes and a little state so debt and inflation will be non existant but that would be mean a survival of the fittest world.''

Social darwinism is the future and since robots will destroy 2/3 of all jobs, unemployment will be common. Better means of production, vehicles, healthcare will appear but the only ones who would be able to afford that will be the upper classes.

love the comment @herzmeister der welten. that is simply beautifully and concisely laid out @chilcreek@diasp.org

Money did not develop out of barter, it developed out of the law courts, as a means of compensation.

Money did not develop out of barter, it developed out of the law courts, as a means of compensation.

Around what time period would you say this began @jalfro?

A long, long time ago. Accounting systems were already being used to control temple and imperial resources (i.e. taxation and pay for functionaries) in 3500BC, at the beginning of written history. This provided for markets to service the bureaucracy, though these functioned mainly on credit, there being little actual currency in circulation. The evidence for how money originated comes from its emergence in more recent societies.

"For example, the oldest coin currency that we know is a Sumerian bronze piece dating from before 3000 BC. On one side of the coin is a representation of a sheaf of wheat, and on the other, Ishtar, the goddess of fertility. The Sumerians called it the "Shekel" where "She" meant wheat, "Kel" was a measurement similar to a bushel, hence this coin was a symbol of a value of one bushel of wheat. (The word "shekel" survives in modern Hebrew as Israel's monetary unit.)

The original shekel had as its purpose payment for sacred prostitution at the temple of Ishtar, which was the temple of life and death."

http://www.stim.com/Stim-x/10.1/origins/origins.html

Is it fair to say that money did not originate to service Law Courts?

Gold & Silver have held the relative same value for 2,000 years.

During the time of the Romans,
1 ounce of gold would buy you a very nice suit (of armor); shoes and accessories.

Right up until today,
1 ounce of gold will still buy you a very nice suit, shoes and accessories.

I feel quite confident thinking of gold & silver as "money".

Much, MUCH more so than I do in an un-backed (except for the full faith and credit of a government in 20 trillion dollars of debt) DOLLAR fiat system.

---

There is a reason that they do not back fiat money with gold now;
while the central banks still rush to purchase physical gold.

And that reason has NOTHING to do with any problems with Gold Or Silver.

the essential reading about all this is the book https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

They don't back money with gold because is unpractical and stupid if you are the USA. You can buy your own debt bonds when their prices are low and then sell them the prices are high to reduce the debt.

They don’t back money with gold because is unpractical and stupid if you are the USA.

You do know that we did it just fine up until 1933, right?

They don’t back money with gold because is unpractical and stupid

… “and stupid”?

How so, exactly?

Note: I'm not talking tricksy US government here.

I'm talking about the average citizen.

@prep

The original shekel had as its purpose payment for sacred prostitution at the temple of Ishtar, which was the temple of life and death

Like I said,

Accounting systems were already being used to control temple and imperial resources (i.e. taxation and pay for functionaries) in 3500BC, at the beginning of written history. This provided for markets to service the bureaucracy,

This would have included payment for 'sacred prostitution' which was, of course, one of the temple functions.

Is it fair to say that money did not originate to service Law Courts?

The point I was making is that this system was already well established when records began, so it can't tell us much about origins. (Though it is significant that it operated alongside a system of credit accounting.)

As @herzmeister der welten says, the definitive text is Graeber's book Debt (see link above). The evidence for the origin of money in legal institutions (either in the arrangement of marriages, or the settlement of grievances) is summarised on pages 60-62.

Fine, if you feel comfortable with gold. Personally I find it a bit heavy on the pockets and I'm much happier with plastic. I certainly don't want to go back to the poverty that prevailed in the gold standard era.

Debt: The First 5,000 years

https://archive.org/details/Debt-The_First_5000_Years

PDF
https://archive.org/download/Debt-The_First_5000_Years/Debt-The_First_5000_Years.pdf

Also available as text, epub, etc.

Fine, if you feel comfortable with gold. Personally I find it a bit heavy on the pockets and I’m much happier with plastic

I guess my focus is future-oriented.

Plastic is swell now; but:

• will be a pain to use after the CME/EMP.

• HELPS bankers establish everything from RFID in your pocket (later in your skin) AND sets up the cashless society where banks get to impose negative interest rates to drain your money. <- WITH NO CASH alternatives.

• will not be useful in any kind of economic (read that: Venezuela) crash.

  • will be worthless once bank bail-ins are kicked in (like in Corsica). Note that the G-8+ have already signed the ability to do this into Laws in each of the member countries (2013).

If you can't touch it -- you don't own it.

Note: fiat money is the paper money backed by nothing real/tangible.

I AM heavily in favor of cash that is backed by something.

• I forgot to add that banking rules (at least in the US) have also recently changed to say that YOUR money in the bank is now Owned by the bank to control. You are a creditor to the bank; and no longer a depositor.

So...

If they want to do bank bail-ins; they are Allowed to take your money and give you essentially an I.O.U. An I.O.U to a failed, possibly bankrupt, bank.

And (AND) you are not first in line to get your money back in bankruptcy hearing. Derivative Holders are. <- those are the folks speculating with money to the quadrillion dollar level currently; or MUCH more than the whole world could pay back even if they wanted to.

Sorry, but -- fiat money/plastic == bad, bad, bad.

Well, for one thing, don't confuse currency with investment.

For another, so called fiat money is backed by the wealth of the society that uses it. True, it is subject to manipulation, but so is everything in our society. The only real wealth is the people you can trust.

Finally, bank with a mutual https://en.wikipedia.org/wiki/Mutualism_%28movement%29

Well, for one thing, don’t confuse currency with investment.

Understood.

I think that gold & silver are both.

The only real wealth is the people you can trust.

I wholeheartedly agree with this sentiment.

But still think Gold > Fiat ;-)

Gold standard is stupid if you know the worlds economy is based in the trust people have in the dollar because when the dollar standard was abandoned the USA currency was the most used in economical transactions due to the big companies based there like the Standard oil and Morgan. Choosing gold will mean an economic crisis that will destroy the hegemony of the USA and the value of many paper currencies.

Choosing gold will mean an economic crisis that will destroy the hegemony of the USA and the value of many paper currencies.

Correct.

I'd rather destroy (FIAT) paper now; than wait (not-to-long) for them all to implode completely; and much more devastatingly; anyway. And, they will.

The Petro-Dollar ( <- the term that you are after) is already breaking down because of BRICS; Sino-Russian oil deals and the desire to purchase oil directly with (YOU GUESSED IT) Gold by countries such as Saudi Arabia & China.

Buy Gold.

Or be doomed.

#Muhahahahahahaha

Petro dollar is doomed due to new renewable energies. And now the brics are so desperate that they reduced the production of oil barrels to raise the price to a mere 55$.
Better to invest in AIs, space and clean energies.

@ prep "You are a creditor to the bank; and no longer a depositor." great point indeed...

http://investmentwatchblog.com/nov-16-2014-g20-to-implement-a-new-policy-that-makes-bank-deposits-on-par-with-paper-investments/

“On Nov. 16 2014, the G20 will implement a new policy that makes bank deposits on par with paper investments, subjecting account holders to declines that one might experience from holding a stock or other security when the next financial banking crisis occurs. Additionally, all member nations of the G20 will immediately submit and pass legislation that will fulfill this program, creating a new paradigm where banks no longer recognize your deposits as money, but as liabilities and securitized capital owned and controlled by the bank or institution.”

http://www.zerohedge.com/contributed/2013-05-15/no-bank-deposits-will-be-spared-confiscation

Instead of complaining about Banks we should create one to satisfy our ideals.... We just need a couple of millions of pennies.

So let's start saving money to achieve that in 10 years or less.

lol

Joachim, such banks already exist. Don't be a creditor, be a member:

http://www.nationwide.co.uk/about/have-your-say/agm

https://saveourbank.coop/