I would almost agree except I would say that the "perceived gap" grows larger. What happens is that people truely are dis-illusionized about just how wide the gap really is. The gap itself does not change a lot, but the perception and realization of it becomes strikingly more obvious. Where before people knew that they had less money and the others had more, now they are getting increasingly aware that it is not just money, it is also power, might, and when it comes to it violence, guns and imprisonment that seperates the 99% from the 1%. The organization of this society becomes more and mroe apparent to those who dare to look.

Well the latter ones are usually either part of the "1%" or are working in their interests. It should not be possible for a person to make more debt than he can get himself out of - because in a functioning economy, someone who needs to loan money will have to run through a check if he is trustworthy and if he can actually pay the money back. If I lend someone 1000€, I pretty surely will look at who he is and if he can pay this back to me, because obviously I want my money back later. But if I can just create that money by typing some numbers in a keyboard, tell the person who wants the money that it is no problem at all, then sell that debt to someone declaring it is safe who then sells it on... then something is wrong here, and it is not really the person who was looking for money. Surely he is not "without sin", but in many cases the people getting into debt were severly misinformed or even just screwed over. If you can make a profit by leding some person who can not afford it enough money to buy a house and in the end you get the house plus all the mortgage rates plus the car of that person because you could just increase the mortgage rates while the contract was running, this is in my eyes fraud.
But I agree that it is not just the 1% that are a problem, it is the system itself and many OWS people do not so much focus on the 1%-slogans but criticize the overall system of economics that allows and promotes such behaviour.

If you believe money is 'created' in that manner, you have no understanding of economics whatsoever.

Yes, credit checks should prevent bad debt, but someone who earns, for example, 20k/year should know that taking out 200k of unsecured debt is a bad idea, and they should be responsible for that themselves even if it was somehow approved.

How exactly is money created, and what gives money value?

I think the concept of money and value are strange in the sense that money essentially becomes worthless the more you have it, that is unless there's someone else who wants that money from you, and is willing to give you something useful in return for it, and thus it means your money has value.

But if we all had loads of money, then all that money would be useless, since nobody would want it anymore. So in a sense, all the rich folk on this planet would be poor if they were isolated from the poor masses that empower them so to speak by needing their money or resources.

Money is very strange indeed.

Money is essentially the promise of someone to return something of value or to make someone else return it. In its original form this was something like a "I owe you" between two people, another form was that of a more universal symbolic token like coins, shells, beads, gold. Lending someone money requires that you trust him on giving it back and you lend him money because you like that person or because he is building something that is good for the community or good for yourself in the end. Then there is interest and this really makes it worse because now you lend money because you get more money back. not only does this system REQUIRE growth (because always there has to be more paid back than was given), it also makes money a resource - like land - that can be used to make a profit. Throughout history, smart people (like that Jesus guy) saw that this is not a good idea and tried to stop it, churches prohibited taking interest on money lending, too.
Today, money is created from debt. In a way it still is a formalized way of the original money in which the "I owe you" token was created at the moment the two people agreed on the transaction, just that now the ideas of trust and trustworthyness are skewed and that some organizations (banks) basically have a monopoly on creating these "I owe you" tokens. There is a lot of solid and good information on the money system in the internet and in books available - it is not much of a secret.
So yes - essentially money is created out of nothing by "typing on a keyboard". Of course the bank needs some reserves (I think it is a few percent of the money they actually lend to someone), but even these reserves do not have to have any limitation as actually having gold in the basement or other concepts that existed in the mid 20th century.

Certainly, someone should be wary is someone comes along and offers him to give him 1000$ and he just can return it later. So indeed the people who get into debt certainly have not done good thinking. But on the other hand, advertisement and PR works pretty well to convince people to get into debt. I guess it is like smoking cigarettes in a way - they are not good for the health but they still sell them. At least with cigarettes, most people are made aware by education that smoking is bad and there are some things done to at least diminish the advertisement and the exposure of especially vulnerable people to that issue. So maybe there should be educational movies about debt (to give people a realistic impression on what it means to be in debt, how long it will take to get out and what they can realistically expect to be able to pay back) and big warning stickers on credit contracts that say "getting into debt can leave you broke". Instead the message people get from those who give them the credit is that they are trustworthy of paying it back, so the financial expert on the other side of the table seems to think that my situation is good enough...

Showing force at the "battle field" is nothing too bad - at least as long as it stays violence free.

What you describe is not limited to money. But rather applies to everything.

If you owned 80 homes, how much is owning an additional house no different than the others worth to you?

If you had 500 pounds of chocolate sitting in your garage, how much is a plain Hershey bar worth to you?

Marginal utility - Wikipedia, the free encyclopedia

well, but if everyone would have enough money... or no one at all... the world could be perhaps a way better place - because there would be no class differences at least in that style anymore

Indeed, but money is different in the sense that it's not really a tangible product like house or chocolate, but rather a promise of value so to speak. There's a limit to how many houses you can build, but the amount of money that can be created is essentially infinite, because most of it is only in electronic form these days.

I think aurora said it better:

As in you can't give people something tangible you don't have, but you can always give people money, because it's essentially just a loan of sorts, that those people are going to have pay you back, usually with interest.

Much like tangible goods, you can't give people money if you don't have it yourself. And while the amount of money that can be created is essentially infinite, the amount of money that actually exists at any time is not. The point remains though, since the amount of money that exists is not infinite, there is scarcity and that scarcity is a large part of what gives pretty much anything it's value. If the amount of money that DID exist was near infinite, then it wouldn't have any value unless it was VERY tightly controlled.

Kind of like what is done with diamonds.


I'm sure this wasn't the idea when it was made, but IMO, one imaginary device that would absolutely destroy society world wide is the star trek replicator. Something that could eliminate the scarcity of all tangible goods permanently? We (meaning humanity) wouldn't know what to do with ourselves.

You can, actually. This is rather the point of the whole mess.

Well, you can in the sense that you can borrow it and repay it later. I'm talking in terms of I can't simply conjure it. Last night a homeless man asked me for 50 cents at a fast food restaurant.

I had used all of the money I had with me to purchase my dinner and was on my way home. Theoretically I could go to a bank and borrow money to give to him, but I can't simply create it right there on the street and give it to him.

But even if I were to borrow it, it's not like it's just coming out of the aether. I'm borrowing it from someone or some sort of organization.

You can, to stretch the metaphor, give him a legally binding contract saying that you'll pay him 50 cents at some point later.

Of course, in the banks case, the homeless man then sells that contract onto somebody else for 40 cents, and he sells it on for slightly less...

Which causes all sorts of things to crash down when, in reality, you don't have any money.

I may have signed an agreement, but I haven't actually given him the money, have I? If you're going to stretch the metaphor that way, then it still applies to tangible goods too. I can give him a legally binding contract saying that I'll give him something.

How do you measure the amount of existing money when it doesn't even exist? For ages now, the amount of money that exists has not been in any relation to the amount of goods and services it is worth so to speak. Money has value only because we all religiously believe it has value, but in reality it's just a piece of paper that's about as valuable as toilet paper.

We wouldn't know what do do if things were actually good?

Money only has value because we all currently agree that it has, and if tomorrow we stop using money as a vehicle of exchange, then all that money would be simply worthless. If today I give you a million dollars, and tomorrow it's all worthless, then I'm under no obligation to provide you anything. I simply gave you nothing, because that's all that money essentially is, just words and promises.

As it stands, money is a rather bad method of exchange as its value isn't constant, but it's something entirely arbitrary that isn't tied to any tangible factor.

99.99% of everyone would be out of a job, for one thing.