MONEY AS DEBT is a misleading movie that contains mayor errors while speaking the monetary system. Money is not debt, and money is never created only out of debt.
I do get tired of reading, "it does not really work like that" comments.It's supposed to be an introductory movie.
And I get tired of people claiming money IS debt. So I just explain that it's not as a precautionary measure.
Moreover, in your follow up text you mention that the bank treats the security you exchanged for the loan also as money! This is the whole way the derivatives bubble was expanded. In other words banks can create far ***more*** money than indicated in the films.
Because it IS money. It's just not as liquid as the money they lent you.
Thus numerous Debt Oligations are fromed into collateralized debt obligations (CDO). You can then further pyramid, ontop of this to make a CDO "Squared". Now the total liabilites in the system are many many times the value of *any underlying asset*....but the biggest joke is that the banks and possibly your pension fund view these pyramid debt bubbles as more "assets"...lol!
Well, they created CDOs in order to profit from the fact that they will be saved by the government if/when the scam is discovered. The system is rigged so when banks have any kind of problem, they socialize loses just like they privatized gains.
It's socialism for the rich and wealthy.