Mind=Blown at economics

On June 06 2011 13:24 MoreFaSho wrote:
I'm still watching the video, but I'm very suspicious of anybody who claims people don't teach something because "they have the power and they don't want you to know".
Edit:
Ugh. Now I'm upset I watched at all. Conspiracy theory "us against them" fallacies:

I reply with this:
http://www.youtube.com/watch?v=5hfYJsQAhl0

On June 06 2011 13:38 TheFrankOne wrote:
This video makes no sense, he fails to really explain what balance sheets are and then goes on about how government debt must grown exponentially along with private debt because of some vast banking conspiracy... or something like that.

Short rebuttal:
From a business perspective debt or capital allows you to create value and through that you can pay back the debt as long as your return is sufficient. Government debt is a result of various fiscal, social and foreign policy decisions, not really some vast money conspiracy.

On June 06 2011 13:33 DatBoiRijad wrote:

He has worked many years for the government, and has taken millions of economics courses.

On June 06 2011 13:48 phyren wrote:
I couldn;t finish this. It seems really dumb and oversimplified too much. He's acting like people only ever get assets by borrowing them from the banks, but that just isn't true. On an individual level, people work and make money for it. On a societal level there is production, i.e. growing food/building properties/etc.

I think the financial system is pretty messed up, but this isn't how.

On June 06 2011 14:10 Treemonkeys wrote:


You forgot the highest level, where people print ink on paper and are paid trillions for it.

On June 06 2011 14:34 tryummm wrote:


Can you document specific cases of people or banks earning trillions?

On June 06 2011 14:50 Treemonkeys wrote:


Why?

On June 06 2011 15:02 TheFrankOne wrote:



Because the same way this guy taking "millions" of econ courses is unreasonable because of how many classes get you a degree, people being paid trillions is unreasonable because the richest people are worth, afaik billions.

On June 06 2011 14:50 Treemonkeys wrote:


Why?

On June 06 2011 15:26 zobz wrote:

Why is Treemonkeys still a member of this site? Honestly?

On June 06 2011 15:23 Treemonkeys wrote:
It's not a conspiracy theory, when you borrow money and pay it back you are paying back money that never existed plus interest and this continues up to the highest level where money is literally "loaned" from nothing but ink. The result is a never ending spiral where there is always more money and interested owed than actually exists in circulation where more money has to be loaned into existence to pay for this and it is a (almost) never ending cycle. Don't even bring up high school anything because they don't teach you jack shit about the creation of money or the banking system in high school.

On June 06 2011 15:27 Caller wrote:

i was legitimately concerned that you were serious here until i looked into your post history and saw how many posts you had in the SCII Strategy section. Well played sir.

On June 06 2011 15:27 Treemonkeys wrote:


Nice dude, you don't like what I'm saying, so you ask why I am allowed here. Real intelligent of you.

On June 06 2011 15:37 zobz wrote:

I thought the amazing depth of content of your posts was self-evident, so I didn't bother to explain. You are a worthless idiot of a troll.

On June 06 2011 13:21 TadH wrote:
Summary:

Interest means that there is more debt than can ever EVER EVER be repaid. PERIOD.

It's actually, physically and theoretically impossible to get out of debt. Simply because of interest.

On June 06 2011 15:41 Kaal wrote:
This is the greatest troll blog in the history of troll blogs.

On June 06 2011 15:43 Treemonkeys wrote:


If this entire thread is nothing but a troll, then why don't you labouriously debunk it?

On June 06 2011 15:48 StorkHwaiting wrote:
What in the fuck is this guy on about. ROFLMAO.

Cash is not the debt of the people. Cash is a debt note of the federal reserve that people hold, AKA Cash = Asset NOT Liability.

His balance sheet is missing equity... I've never seen a balance sheet where equity didn't exist before. This guy is amazingly psycho.

Liability does not = loss of power. It just means how much of your asset is owned by someone other than you.

All you would need to do to mitigate debt is have an asset whose ROI > Interest rate of the liabilities.

What a crock of shit this guy is.

The reason gov't debt increases is because the gov't is corrupt as hell and they make many investments that don't yield a return greater than interest, instead they yield a horrendous loss. It has nothing to do with fiat currency, whose biggest issue is with forex trading, manipulation of inflation/money supply, and basically using money as a commodity. NOT because of the fundamental debt-based nature of the currency -__-.

If you actually knew what you were mouthing off about, it would be easy for you to comment on it intelligently.

On June 06 2011 15:57 Caller wrote:

well that explains a lot of things

On June 06 2011 15:59 Treemonkeys wrote:


The video itself does a decent job explaining what I am talking about and no one in this blog has shown a solid argument against it, or even an argument at all. Just insults and strawmen.

On June 06 2011 15:53 Treemonkeys wrote:


Simply put all cash is owed to the fed reserve, plus interest. On a wide scale it cannot be paid back because all returns on investments must be paid with the very same dollar that is always created with interest attached to it. There are always going to be more losers than winners and the only real winners are the bankers.

On June 06 2011 15:59 Treemonkeys wrote:


The video itself does a decent job explaining what I am talking about and no one in this blog has shown a solid argument against it, or even an argument at all. Just insults and strawmen.

On June 06 2011 16:03 StorkHwaiting wrote:


...No dude.

Cash = The Fed owes YOU. You've got it totally backwards.

Simply put, all cash is debt of the Federal reserve and there is absolutely no interest. Unless by interest you mean inflation/deflation, which is derived from basic supply/demand.

The interest rate set by the Fed is what they charge major banks and often affects the bond market.

In general, you've got it all wrong. Go read basic concept of the Federal Reserve Note and Fiat Currency. Then learn what a balance sheet is and what interest is. Then realize the guy in this video is a moron.

On June 06 2011 15:59 Treemonkeys wrote:


The video itself does a decent job explaining what I am talking about and no one in this blog has shown a solid argument against it, or even an argument at all. Just insults and strawmen.

I'll make this very simple for you naysayers: Name one situation where money is created NOT as an asset to a bank's balance sheet. One. Shouldn't take long, right? Limited to US dollars. Go.

On June 06 2011 16:14 StorkHwaiting wrote:


What? Cash is always an asset. It's completely liquid. There's no way cash can NOT be an asset. The question here is why you would think this is a problem.

Let me explain a simple dynamic to you:

Bank lends you $100

Bank Balance Sheet:

Asset: $100
Liability: $0
Equity: $0

Your Balance Sheet:

Asset: $100
Liability: $100
Equity: $0

You then buy $100 worth of raw cocaine. You turn around and sell the cocaine for $500.

Bank Balance Sheet:
Asset: $100
Liability: $0
Equity: $0

Your Balance Sheet:
Asset: $500
Liability: $100
Equity: $0

You then pay the bank back the $100 + interest. Let's say 100%.

Bank Balance Sheet:
Asset: $200
Liability: $0
Equity: $0

Your Balance Sheet:
Asset: $300
Liability: $0
Equity: $0

You just gained $300. Bank gained $100.

How exactly is this an impossible situation?

On June 06 2011 16:06 Treemonkeys wrote:


The feds owe you? That is hilarious. They admitted this would never be the case with the end of bretton woods. You guys are putting in more effort into explaining why it's not worth your time to explain, than you are actually explaining anything.

The interest the feds charge is for money they loan to other banks. Where does this money come from?

Once again:

I'll make this very simple for you naysayers: Name one situation where money is created NOT as an asset to a bank's balance sheet. One. Shouldn't take long, right? Limited to US dollars. Go.

On June 06 2011 16:22 Treemonkeys wrote:


The $400 you made off selling cocaine is still US dollars which were all created with interest attached to it. Dollars are always created with interest. Which means there is never enough money in circulation to pay back what is owed including the interest. On top of that, banks can loan out 9 times what is on their balance sheet, making it that much further from "possible". Money is really a very simple pyramid scheme.

On June 06 2011 16:23 StorkHwaiting wrote:


Or I guess I can just do the most simple process of all.

Fed creates $100

Bank Balance Sheet:

Asset: $100
Liability: $100
Equity: $0

Oh look. They have $100 in Cash Assets. But they have $100 in Liabilities too. AKA they gained 0.

Then they lend it to a bank at 3%.

Oh look, they printed $100 then made $3 on it after a year of lending it to a bank. Oh god, they're making money off interest! How evil!

Do you think the Fed runs the banking system of this country for free? Ofc they're going to charge interest. And of course they're the ones in power if they get to print money. A monkey could figure this out.

The question is why is this a problem? Do you seriously expect a currency system that's not for profit?

On June 06 2011 16:24 Caller wrote:

no wonder my bank account gets smaller and smaller every day its cuz the bank is taking interest from my account

im going to hide in under my mattress lets see how they get their interest then, they'll have to get it from my cold dead hands

On June 06 2011 16:22 Treemonkeys wrote:


The $400 you made off selling cocaine is still US dollars which were all created with interest attached to it. Dollars are always created with interest. Which means there is never enough money in circulation to pay back what is owed including the interest. On top of that, banks can loan out 9 times what is on their balance sheet, making it that much further from "possible". Money is really a very simple pyramid scheme.

On June 06 2011 16:27 Treemonkeys wrote:


Why is it a problem that a certain group of bankers are paid billions of dollars plus interest for printing ink on paper and adding numbers electronically? If this isn't self evident to you, then I kind of envy your naivety. I say that with complete sincerity, I wish I wasn't as bothered by getting screwed as I am.

On June 06 2011 16:28 StorkHwaiting wrote:


Dollars are not created with interest. Dollars are circulated into the system with interest through loan instruments. Creation and circulation are two different things.

And yes, I know they can loan out 9x. 10% reserve ratio in US on big banks.

Yes, money is a pyramid scheme. That's the entire point of fiat. That's the entire point of a DEBT based society.

What blows my mind is that you are just now realizing that the US economy runs on debt. I guess to laymen the concept of debt has a negative connotation. In economics/banking/finance that's just the name of the game. There are plenty of ways you can make money so that you never live in debt. Is there a chance for every citizen in America to be out of debt? No. There is not. But there never has been in the history of the world. So I don't see why you'd cry about it now.

Does this youtube explain any of that properly? No.

On June 06 2011 16:31 StorkHwaiting wrote:


I'm not naive. You're the naive one. If you think it's wrong they're making that much money, then why don't you propose an alternative industry that can handle all the functions of the banking/finance industry and find enough capable people to staff it for a much lower sum of money.

The fact of the matter is the vast majority of citizens either don't care, are incapable, or don't understand enough about finance/banking to do the job. So, a few experts are paid vast sums of money to take care of everyone else's money. It's a simple concept. Maybe when half the population wants to be financial experts and take care of all the minutiae of capital flows and investments and day-to-day economic transactions, then you can hope for an industry that's not vastly overpaid for what they do.

On June 06 2011 16:32 Treemonkeys wrote:


You are just using different words for created. Not created "circulated". Since you are saying they are different things, then explain how they are different. You cannot circulate without first creating. I realized that money was a pyramid scheme a few years ago, if you want to be mind blown at stupid timing of me realizing this then that is fine. People have always been screwed over by money, it's nothing new, you are certainly correct there.

On June 06 2011 16:14 StorkHwaiting wrote:
What? Cash is always an asset. It's completely liquid. There's no way cash can NOT be an asset. The question here is why you would think this is a problem.

On June 06 2011 17:09 Romantic wrote:
Hiss, people think money is a conspiracy\pyramid scheme lol.

I don't see why people are hung up on the idea not all debts can be paid back at once

On June 06 2011 17:11 Treemonkeys wrote:


Being a perpetual debt slave bothers me sometimes. At least there is starcraft to pacify me.

On June 06 2011 17:15 Romantic wrote:


Debt isn't a bad thing. You'd have to demonstrate why debt is a bad thing.

People need loans for school, buying a home, buying a car, starting a business. People have capital and you are in need of it; people who are willing to pay the interest rate probably do it because they are doing something productive with it.

An economy with no debt would be an economy without lenders.

On June 06 2011 17:18 Treemonkeys wrote:


The banker is just a middle man, it isn't needed, it's just a way to leech wealth. At the top level the capital is created from things that are intrinsically worthless.

On June 06 2011 16:23 StorkHwaiting wrote:
The question is why is this a problem? Do you seriously expect a currency system that's not for profit?

On June 06 2011 17:21 Romantic wrote:


Supermarkets and used car salesmen are just middle men. Are they leeches or do they perform a service of finding buyers and sellers and putting them together (in the case of banks, finding lenders and borrowers)?

On June 06 2011 17:21 VIB wrote:
Isn't it a problem that this administrative profit is going to a private company for a service the government could be doing themselves?

Can't the government just get rid of the fed and do this service easy? Don't you think we're paying for a HUGELY overpriced service compared to what it could be? Aren't we wasting money? Isn't that equivalent to embezzlement?

On June 06 2011 17:24 Treemonkeys wrote:


Supermarkets and used car salesman cannot create cars and groceries from ink and paper.

On June 06 2011 17:21 VIB wrote:
If central banks were 100% public, that would be fine.

On June 06 2011 17:30 Romantic wrote:
What does 100% public mean?

On June 06 2011 17:49 VIB wrote:
100% of it's profit going to government? In most countries the central bank is partly or entirely made of private capital. So that money the government pays from debts goes to private bankers. Money that could be used to build infrastructure going to bankers.

The whole "scam" people talk about is that we're paying to private bankers money that we didn't need to pay in the first place.

On June 06 2011 17:21 VIB wrote:
Isn't it a problem that this administrative profit is going to a private company for a service the government could be doing themselves?

Can't the government just get rid of the fed and do this service easy? Don't you think we're paying for a HUGELY overpriced service compared to what it could be? Aren't we wasting money? Isn't that equivalent to embezzlement?

The only problem I have is that unnecessary money is going from public -> private for no good reason. If central banks were 100% public, that would be fine.

On June 06 2011 18:13 Romantic wrote:


I don't understand. In most countries the central bank has the power to directly create currency, set some key interest rates, etc. Made up of private capital...?

Also, 100% of the US Federal Reserve's profit is deposited in the US treasury.

On June 06 2011 14:50 Treemonkeys wrote:


Why?