41 Comments
Inline Feedbacks
View all comments
VoluntaryJoe
VoluntaryJoe
12 years ago

http://www.youtube.com/watch?v=d0nERTFo-Sk

Does wealth come from saving and investment or spending and consumption? Hmmm…

Hank Curmudgeon
Hank Curmudgeon
12 years ago

THIS is a GREAT example of municipal salary insanity…

http://briancalle.ocregister.com/2012/08/10/hermosa-beach-meter-maids-making-nearly-100k/

“There has been opposition to the outsourcing proposal from Hermosa Beach’s Police Chief Steve Johnson and Councilman Howard Fishman. Both expressed concerns about letting go full-time city staff. Bobko accurately characterized the resistance: “When you outsource, you take away union jobs.”

Suzanne
Suzanne
12 years ago

Not sure on the 1969 “moon landing” or the latest Mars story. I have questions as to the truth of both.

krispycritter
krispycritter
12 years ago

That may be but I still get great AM reception on mine!

Jasper
Jasper
12 years ago

Well, I do believe you guys over there managed to put a craft on Mars…….. BUT……. listening to this episode, I think there a better ways to invest those billions of dollars they’ve now spent on learning the history of another planet, while fíng up the one we need to live on for the next few years….. Still awesome to be on Mars though.

BarnGeek
12 years ago

Neither, Wealth comes from production.

doug
doug
12 years ago
Reply to  BarnGeek

@BarnGeek, Nature is made up of energy systems. The economy is another energy system. The 20th century economic expansion happened largely because of petroleum (a new, cheap, and abundant energy source getting injected into the economy. This is a dated 2005 documentary but it does a relatively good job on the historic development of Suburbia that oil made possible http://www.youtube.com/watch?v=Q3uvzcY2Xug That energy source made it possible to extract more raw materials, farm more lands, transport more food, and move more goods – to name just a few. Too many people think Bill Clinton was a good president because he balanced the budget. But during his presidency the price of oil was as low as $8/bbl. You can do a lot with that economically when your energy source is that cheap. For starters, unless we can find a massive new source of oil or switch to a different energy source that has a net energy return that oil once had economic growth will go into decline (as if it wasn’t already).
I think cities going bankrupt can be traced back to the Clinton admin in that the city planners were short sighted and thought the economic expansion they had was the norm going into the future. I could also make this outlook more complex by bringing in industrial commodities like copper that are becoming more costly to extract as well.

BarnGeek
12 years ago
Reply to  BarnGeek

@ Modern Survival, So then your wealth is in the resources you have put away to rely on without conventional income? Okay, I agree that is how wealth is stored, but not where it comes from. Even the quote you gave from Buckminister Fuller eludes to where wealth comes from, “conventional income” I think you and I are talking about different things, or at least different phases of the same thing. I agree that if you spend all you produce than you will have no wealth, however if you did not produce, than you never had the wealth to spend, or to save by converting into resources. I believe that all true wealth comes from production, defined as knowledge applied or information in action. Let’s use the oil example that Doug proposes. While I agree that much of the industrial wealth created in the 20th century was greatly enhanced by using cheap oil as an energy source, I do not agree that the oil “cheap energy” is what created it. I’ll prove my point by asking a few questions. How long before the 20th century did the oil exist in the ground? In that time did the oil ever pump itself out of the ground? or invent a way to process itself into fuel? Did it build an automobile engine in which to burn? Another example, I get a great deal of wealth or value from the things I have learned on The Survival Podcast. I am sure that a great deal of energy is exerted to created the wealth that is produced here. Alot of that energy comes from food which comes from the energies in nature. Sure, I get that however that energy could be wasted (like at a one hour meeting at a home owners association) or it can be utilized to bring wealth to thousands of listeners. In both cases energy was used, but only one created true wealth. That is why I believe wealth comes from production.

BarnGeek
12 years ago

@ Modern Survival, Well sure, there is no wealth without the earth and it’s systems, but that is like saying there is no apple pie without apples. While that is true, you still need the baker to make the apple pie. Of course you could say that the baker is part of a natural system as well, if that’s the case then okay you win.

Is the wealth you are referring to contained 100% within either matter or energy? If that’s the case then I understand where you are coming from. If wealth is only in matter and energy than the earth has only gained wealth from the sun and other raw materials from space since the earth was formed.

But that is not the yardstick that men measure wealth by. If it were then there would have been no need or desire to move beyond a primitive lifestyle. In fact there would have been no need to evolve beyond a monkey swinging in the trees.

Men measure wealth by things like health, comfort, convenience and things of that nature. So really wealth is not contained in material things but what those things can provide for the people who posses them.

BarnGeek
12 years ago

@ Modern Survival, I am enjoying this debate, as I hope you are to. I could go on siting example after example of my point but until I understand where you are coming from then I cannot debate you. Please, give an example, or explanation.

I will say this: No, I do not believe that “if no people were on earth the earth would be devoid of wealth” There are two sides to the equation. One is the materials and resources from natural systems, and the other is the value added to those resources. Both are essential to create wealth. Both are essential to survival of the human race.

I am trying to imagine how a human could survive without adding any value to a natural system. As soon as you do anything, such as plant a seed or harvest and store food you are adding value and creating wealth for yourself and others. So again I come to the conclusion that wealth is created by production. If there is something I am missing than please lead me to it.

BarnGeek
12 years ago

I meant citing. Darn, spell checker.

BarnGeek
12 years ago

Let’s use your example of the 5,000 acres of virgin forest. What value is it as it stands? What if you selectively harvest trees and manage that forest, not only to produce more but also to provide lumber for peoples homes? So what have you done? You have taken that natural resource and not only improved it but also used it to build homes thus producing wealth.

BarnGeek
12 years ago

Now as far as that virgin forest is concerned I can tell you that the system can be improved for the benefit of all including the ecosystem, there by sustainable forest management. Now I am not saying we should jump in and start managing what virgin forests we have left. We shouldn’t even consider that until we have done right by the forests we already manage. I have long advocated this as a logger and later as a writer in the logging industry.

http://logging.about.com/od/Eco-Friendly-Logging/u/A-Guide-To-Sustainable-Forestry.htm

an article I wrote when at about.com.

I believe that one of the proposes of mankind is to be a steward of the earth, and that the earth can be better off with the stewardship of man. However we have more often failed in that purpose, than succeeded.

BarnGeek
12 years ago
Reply to  BarnGeek

What if you did not harvest? What value would that be to you or others you are trying to feed? The value added or wealth created is in the act of harvesting so that you and others can be sustained and enriched.

What if you created a food forest and never ate from it? For that matter what if you never created the food forest to begin with? What value to people would it be if all the resources where left alone and none could benefit from it? What if nobody ever developed a hybrid plant that produces more than it’s parent? All of these activities create value and wealth. These activities produce, therefore production creates wealth.

As for consumption, Science says that matter cannot be either created or destroyed, only transformed. The same with energy. Energy can transform into matter (photosynthesis) and matter back into energy (burning wood)

So weather you harvest an apple and eat it, or let it fall to the ground and rot, either way nothing is consumed, it is only transformed.

BarnGeek
12 years ago
Reply to  BarnGeek

@ Modern Survival, Thank you sir for that explanation, and thank you as well for your production of the Survival Podcast which has added value to the wealth of myself and my family. I have a daughter with Aspergers (at least we think she does) and I didn’t realize it until you mentioned it on your show. Our family is wealthier now because we are educated about the syndrome. It has greatly helped our family system.

I can’t say that I disagree with anything you said in your last comment, in fact I would have to say that I whole heartedly agree. In fact I would say that I would change my original statement to say that wealth comes from natural systems and production. By production I mean true value added. Not things like a plastic flashlight from the dollar store that falls apart five minutes after you turn it on, and is made by kids working in appalling conditions overseas. I am talking about making a product that truly improves ones life.

I totally agree with your statement “one… does not have to loose so another can profit” In fact I would also say that one does not truly produce wealth unless the thing he produces creates a profit for the customer, the earth, and himself. This is true wealth.

Voluntary Joe
Voluntary Joe
12 years ago
Reply to  BarnGeek

“Neither, Wealth comes from production.” – Neither of the means I suggested exclude production as a factor. 🙂

What I’m implying is a question about business cycle theory, specifically Keynesian v. Austrian perspective. Perhaps I should have done a better job of implying

Hank Curmudgeon
Hank Curmudgeon
12 years ago

Go the the opposite way from municipal bankruptcy and here is a guy who gets it, creates something great and doesn’t spend a dime of taxpayers money doing it! This guy might be worthy of a podcast on how preppers could get free computer systems.

http://ifixit.org/3001/how-one-teacher-built-a-computer-lab-for-free/
“How one teacher built a computer lab for free”

"Top" W. Kone
12 years ago

I looked up online and found something that may or may not be accurate. of the few cities that have declared bankruptcy so far, most have a debtet to person ratio of $4,500 to $5,500.

I’m sure this is not an accurate 100% percent guaranteed fact. it’s what I’ve been able to figure out from the newspaper reports.

but it is an interesting gauge to use to compare your current city that you live in with.

my city has the debt to person ratio of $3890.

We also just fought the city councle over their plan to tear down an existing recreation center in building new one. except that the current building still has a 5 year bond on it. yes, they want to tear down a building they haven’t paid for it to build a new 1 that they don’t have the money for.

krispycritter
krispycritter
12 years ago
Reply to  "Top" W. Kone

Definition of Insanity=Doing the Same Thing Over and Over Expecting a Different Outcome=Government at All Levels.
FL was considering paying off the Sugar Cartels with a few billion dollars to buy their land holdings after which the taxpayers would be footing the bill for the cleanup of the very pricey toxic waste dump the SC’s created. That is instead of actually making the SC’s clean up the mess themselves and paying for it. All while their industry is already subsidized by the .Gov making our sugar some of the highest priced in the world.

"Top" W. Kone
12 years ago
Reply to  "Top" W. Kone

Something else I learned when we were trying to stop the plan. It is hard to find out exactly how much debt a city has. the city budget “followed state disclosure law and approved accounting practices”. We had to hire an accountant to find out how much debt there was.

Some bonds were clearly listed, other bonds were listed embedded with in expenses or “placed in clear budget lines with in departments that utilized the bonds”. Or the debt was not bonds but loans made to the city by groups or another city(!).

We had come to a meeting to disagree with the whole idea of tearing down the center that was built 12 years ago with a bond issue that still had 5 or so more years to pay off with a new place funded by new bonds. After we had our say, the pro-planers announced we had no clue what we were talking about, the Rec center had been paid off two years ago. (with the implied “loons” tacked at the end.)

We found out that the issued bonds had been paid off early two years ago, by the city issuing new bonds for more money at a lower rate. So yes, we were wrong but we were right. This made the issue less easy to explain to the voters and I think that is why we lost.

doug
doug
12 years ago

Jack mentioned the 100+ trillion in debt the country faces. Here’s a quote from the president of the Dallas Fed
http://www.dallasfed.org/news/speeches/fisher/2010/fs100210.cfm
“We cannot count forever on the largess or the misfortune of others to mask our own imbalances here at home—for fiscal profligacy in Washington today hinders our ability to address fiscal challenges tomorrow.”
“These challenges are coming. Off balance sheet, there lie two massive, unfunded liabilities not accounted for in the “conventional budget accounting” of the federal government—most significantly, Social Security and the government obligations of current Medicare programs.”
“Pundits and analysts like to focus on the year in which Social Security will go permanently into the red on an annual cash flow basis—which recently was projected to occur in 2019 but could occur as early as 2016. But they largely ignore the severity of the broader problem: accumulated entitlement debt over the infinite horizon. According to our calculations at the Dallas Fed, that unfunded debt of Social Security and Medicare combined has now reached $104 trillion—trillion with a ‘T’—in discounted present value. And while much attention in recent years has been devoted to Social Security, the lion’s share of the total entitlement shortfall (nearly $90 trillion) actually comes from Medicare. This is a prodigious number. Others—like Pete Peterson’s foundation, which uses a different time horizon in its methodology—calculate the unfunded liability at north of $40 trillion, growing by a sum of $2 trillion to $3 trillion per year. No matter. The problem is frightful, whether you take his numbers or ours.” – Richard W. Fisher, Dallas Federal Reserve.”

DoubleOught
DoubleOught
12 years ago

I have NEVER considered that we in the US subsidize the Health Care systems in other countries as well as their armed forces indirectly. That gives me something to look in to. Thanks!

@doug: “his name is my name too,” guess I’m not the only doug around

Jake
Jake
12 years ago

Any chance we could get the link to the social security article you mentioned?

Surfivor
Surfivor
12 years ago

Jack,

I hear what your are saying on exaggerations, but I do get the sense that the system does not want people to be self sufficient, healthy, and so on. The episodes I hear about armed raids of people selling Raw milk are some of the kinds of things that make me think that way and some other things. I have also looked into UN Agenda 21 which seems to be a real thing and is very anti self sufficient. How could that happen ? I don’t know, maybe if the USA needed a loan from the world bank they might stick us with that, all I know is it is an actual plan.

Surfivor
Surfivor
12 years ago
Reply to  Surfivor

Jack,

I have a hard time with people in my family at times. I also think that the rabbit hole of deception and lies is very deep and hard to believe such that some people will never believe it until maybe well after collapse.

I think there could be a kind of false flag on vegetables. Something like diseases released on purpose or on bigger factory farms, then people get sick or die and more regs ensue. Maybe there has been some of that already as well as disinfo on what you need to be healthy. The system seems to have ways to push some hidden agenda that is always going on at some level.

trackback

[…] (August 13th), Jack Spirko of The Survival Podcast did a segment on money creation and quantitative easing.  I am versed in money creation by the Federal Reserve, […]

PrepperJim
PrepperJim
12 years ago

I have created a series of pictures demonstrating the money creation cycle through the Federal Reserve. I shamelessly link to my blog. <a href=" http://winterant.com/home.html/2012/08/money-creation/ " title = "Money Creation" /

http://winterant.com/home.html/2012/08/money-creation/

PrepperJim
PrepperJim
12 years ago
Reply to  PrepperJim

Thanks Jack!

Joe Dupont
Joe Dupont
12 years ago

brillient

show jackie up the good work

dk1138
dk1138
12 years ago

Regarding being proud of being an American:

-This was, IMHO, extremely well-said. Right up there with some of the Memorial Day, Thanksgiving, etc, broadcasts.

-Members of the armed forces, all of whom swear an oath, do so to the Constitution. Although “The Constitution” has been politicized in the mainstream discourse (now it is a “right wing” thing ?!?), it is very basic that the US military swears its allegiance to the US Constitution and not any specific elected government, person, or creed. That is a great thing indeed.

-Regarding other countries having a similar constitution: Many of the concepts in the US arose from French philosophy of nation and government… The concept that one could be part of a nation by sharing in its values and ideals, rather than by national origin. Not an accident that many early friends of the US were French (e.g. Marquis de La Fayette). Just a minor historical geek point, but worth making with all the France-bashing back in the early 2000’s…

As always, Jack, a great show!

David

Josh Miller
Josh Miller
12 years ago

It’s amazing to me that there are not more problems with cities/schools going bankrupt. I bought my house in 2010 as a short sale 2 days before it was to be auctioned off at the courthouse as a foreclosure.

In 2008, the property taxes were $1000/month. Today, the property taxes are around $450/month. That’s a pretty significant difference in “revenue” to the local governments.

One of the many reasons that I’m going to sell and move elsewhere is that property taxes could very well go back up to that height and I’m certain that the high property taxes contributed to the previous family being foreclosed upon.

Caylen
Caylen
12 years ago

Hey Jack
Just wanna add that the mini “nuclear power plant” that the rover uses is actually a “nuclear battery” that uses the radiation or heat as a energy source. These have been used in pace makers and varios things that require little energy for long periods. We’re a long way away from anything that can fit in a car of even a truck thats what we traditionally see as “nuclear power generation” with normal turbine generators(strange that even the most modern power plants inevitably use a form of steam?). These aren’t very efficient with efficiencies not above 10%(compared to a standard car engine which is between 18-20% with the absolute limit).

Just thought clarifying this might help as some people might get confused as to what you mean by “nuclear power plant”.

My sources: http://www.jpl.nasa.gov/news/fact_sheets/mars-power-heating.pdf via wikipedia