More smart people have gone broke through leverage than to any other activity. A smart person can’t go broke unless they use leverage. As one of my friends says: If you’re smart, you don’t need it. And if you’re dumb you’ve got no business using it. So, it just doesn’t make sense.

-Warren Buffett

Investing isn’t gambling, there’s a real distinction. Basically, it’s subjective, but in investment attitude you look at the asset itself to produce the return. So if I buy a farm and I expect it to produce $80 an acre for me in terms of it’s revenue from corn, soya beans etc. and it cost me $600. I’m looking at the return from the farm itself. I’m not looking at the price of the farm every day or every week or every year. On the other hand if I buy a stock and I hope it goes up next week, to me that’s pure speculation.

-Warren Buffett

The video illustrates the relationship between the home-owners, banks, brokers, hedge funds, CDO’s, investment bankers, prime mortgages, sub-prime mortgages etc. and makes it easy for anybody to understand.

Rolling Stone wrote an interesting article called The Big Takeover. It is subtitled The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution.

Exactly how much does one trillion dollars look like? This post illustrates and compares how much one hundred, ten thousand, one million, one billion and how much one trillion dollars looks like.

• what money actually is and how it came about
• how loans first came about and how loans are created
• that banks do not lend money, they create it

This highly recommended video illustrates the progression of money, loans and debt.

The Money As Debt DVD can be bought here.