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On July 12 2011 07:18 vlf wrote:
For the last time, there's a difference. I have a problem with what you call "creating money" as you're applying the definition erroneously. You're using broadness and ambiguity to reiterate baseless anti-banking propaganda.
Nevermind, it's like talking to a brick wall. I've already explained how the system works, I do NOT need YOU to enlighten me on this issue. You're repeating certain things I said without understanding the simple differences and fine intricacies of the system, do you even realize this? What you're doing is parroting information without actually understanding the ramifications of the whole system, what they entail and just how sensitive they are.
I'm not about to try and teach market economics to someone who believes interest rates should be abolished and doesn't understand the basic principles of fiat currency. Even the questions you posed oozed unfamiliarity with the topic, yet you still try to lecture me on the subject. Sigh.
I'm kind of in his boat, too. I think it's a huge problem and it's only going to get worse as things keep ramping up exponentially.
I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment).
After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation.
Big corporations that are producing things like iPads, turning a cheap amount of real-world materials into something far more expensive than the sum of the parts, or artists producing heavily-sought-after pieces of art, are creating value out of essentially nothing, which (I imagine) is supposed to match how money comes out of nowhere. But, I don't think the world is going to keep up with a pace like that. Peak Oil is going to be a pretty big moment in our monetary future.
This is how I currently think of the whole monetary situation in my head. I'm hoping I've just made some people truly wise in the nature of economics blow a gasket with my grosse oversimplification who will take the time to correct me, because the situation looks pretty bleak from where I'm standing.
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i have been serious.
and wtf does the performance of the german central bank has to do with this topic ?
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I really wish people would stop arguing economics by posting YouTube videos. Seriously people, even posting Wikipedia links is better. Try to find some real sources to back up your arguments, you know from actual economists, not some loons ranting on YouTube.
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On July 12 2011 06:48 vlf wrote:
It's not created in the sense that it cannot be issued at will, as I explained, there need to be deposits or there's no monetary multiplier. I'm pretty sure you understand the distinction between addition and multiplication, the same principle applies - zero input, output from multiplication is null, while printing money functions as addiction, increments to the monetary base which do not fall under the jurisdiction of Commercial Banks, under normal circumstances.
I know what you're trying to say and it simply doesn't work, not even as a purely metaphysical concept. What you're proposing is a HUGE liquidity constraint on funds which aren't being utilized, the outcome of which would be a huge economic slump followed by recession, please do remember that what propelled the 2008 crisis was, precisely, a credit crunch. Lending/borrowing and subsequently interest, which is nothing more than an opportunity cost, are extremely important. Central banks are often independent institutions so that they can actually do their job, without being impeded by subversive political schemes.
Actually, banks lending out up 10 times what they have on their books IS creating money out of thin air, at will. Who chooses when to lend the money? The bank. Your distinction seems to be based entirely on semantics, but the end result is that money is being created.
I'm not going to address the rest, because yeah, debt is very much needed at this point for modern society. I just object to your obfuscation of what is going on. Your talk of multiplication and addition is just lol. Sure, you need a deposit. Then you lend it out a bunch of times at the same time, oh look, money out of thin air!
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The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes.
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On July 12 2011 12:08 tadL wrote:
The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes.
I don't know if I'm right, but I think we can't kick Greece or any other member of the EU out.
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On July 13 2011 00:19 FLu wrote:Show nested quote +On July 12 2011 12:08 tadL wrote:
The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes. I don't know if I'm right, but I think we can't kick Greece or any other member of the EU out.
Why is that? Seriously, is there something that forbids countries from being removed from the eu once they get their foot in?
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On July 13 2011 01:42 T0fuuu wrote:Show nested quote +On July 13 2011 00:19 FLu wrote:On July 12 2011 12:08 tadL wrote:
The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes. I don't know if I'm right, but I think we can't kick Greece or any other member of the EU out. Why is that? Seriously, is there something that forbids countries from being removed from the eu once they get their foot in?
it's not that it's forbidden, it's that when the EU was created there was no provision put in place over what the process is if they do want to kick a country out. they probably weren't expecting to have to kick anyone out (or for any country to willingly leave).
On July 12 2011 12:08 tadL wrote:
The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes.
the debt ceiling will almost certainly be raised (i think it's been raised something like 17 times in the past 20-30 years), so i don't really think that's an issue -- the press conferences and stories of clashes within congress are more for a media show than anything else i think.
the issue with the united states is similar to the situation in greece in that we are spending far more than we make, except that, unlike greece, the US actually has a fair amount of internally generated revenue (from their own economy, as opposed to borrowing everything). the solution is to either increase income (through taxes) or decrease spending, and in an (historically) ideologically conservative nation like the US, i don't think the former is a serious option.
opinions about billionaires in the US paying the lowest tax rates are debatable (and your position will differ depending on how far right or left you lean) and are dependent upon whether or not you believe those billionaires are given their wealth or whether they earn their way into it, but the wealthiest 1% of citizens in the US are paying nearly 40% of total taxes and the upper 50% are paying something like 95% (will look up sources later, but this has been stated in several publications like the WSJ/bloomberg/the economist), so in terms of real dollars the highest earners are still paying the most.
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On July 12 2011 12:08 tadL wrote:
The Euro will stay stable, cause Europe has more options. Paying or kicking Greece out are just simple ones. Ofc Europe is debating what to do and ofc all countrys try t get the best deal out of it. But in the end - the Euro will stay save. I cauld go in deeper analysis but my english is quiete terrible i think and it is sad to say it but i really dont think that us americans will understand it. ofc there are some in this forum but after following this forum and his members...it is not worth it. Who wants to understand it does it already cause he or she reads the right newspapers.
I would like to ask what will happen with the united states after august. Cause now you have zero money. And after august you have to pay things. And without a change you cant pay. Will be interesting to see what an stupid solution republicans and democrats will find. Cause the only real solution is not a possible choice thx to politic.
btw
I love a country where Hedgefonds-billionaire have a single law that protects them so that they have to pay just 15% of taxes.
Oh, don't get me started on those idiots. A headline on CNN last night made me want to punch Boehner in the nose. "It takes two to tango", does it? Well how about you start negotiating with the Democrats for a solution by considering tax increases, instead of sitting in the corner in a sulk, expecting everyone else to do the work for you, you damned hypocrite?
They'll huff and puff, posture and do their usual political nonsense, but they'll eventually come to a solution at the last minute that will inevitably end up in another political circus where the solution pisses off everybody, but everybody blames the other side for exploiting the situation for political gain.
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On July 12 2011 07:38 Bibdy wrote:
I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment).
After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation.
Hate arguing
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Meh, US owes so much, Greece is screwed, almost every country in the world owes money.
They said that China had a lot of money then few months ago in the headlines "China hid hundreds of million in debt" or something like that.
Was in Icelandic so don´t know....
The Icelandic króna has lost twice its value the last 4 years but who cares makes my money worth less not like we need any of it.. lol
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On July 12 2011 07:38 Bibdy wrote:Show nested quote +On July 12 2011 07:18 vlf wrote:
For the last time, there's a difference. I have a problem with what you call "creating money" as you're applying the definition erroneously. You're using broadness and ambiguity to reiterate baseless anti-banking propaganda.
Nevermind, it's like talking to a brick wall. I've already explained how the system works, I do NOT need YOU to enlighten me on this issue. You're repeating certain things I said without understanding the simple differences and fine intricacies of the system, do you even realize this? What you're doing is parroting information without actually understanding the ramifications of the whole system, what they entail and just how sensitive they are.
I'm not about to try and teach market economics to someone who believes interest rates should be abolished and doesn't understand the basic principles of fiat currency. Even the questions you posed oozed unfamiliarity with the topic, yet you still try to lecture me on the subject. Sigh. I'm kind of in his boat, too. I think it's a huge problem and it's only going to get worse as things keep ramping up exponentially. I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment). After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. Big corporations that are producing things like iPads, turning a cheap amount of real-world materials into something far more expensive than the sum of the parts, or artists producing heavily-sought-after pieces of art, are creating value out of essentially nothing, which (I imagine) is supposed to match how money comes out of nowhere. But, I don't think the world is going to keep up with a pace like that. Peak Oil is going to be a pretty big moment in our monetary future. This is how I currently think of the whole monetary situation in my head. I'm hoping I've just made some people truly wise in the nature of economics blow a gasket with my grosse oversimplification who will take the time to correct me, because the situation looks pretty bleak from where I'm standing.
You just demonstrated a perfect understanding of the solution to the problem you think you see. It is possible to create wealth by giving order to disordered bits and bobs; soil, water, and sunlight can be arranged into a plant, which is worth much more to a person than that dirt, water, and sunshine were. Thus a farmer can spend some of his time creating wealth and then use that wealth to improve his own life in some way. The same goes for everyone else who works in the private sector.
Without wealth creation, you cannot have an economy because everyone who performs any kind of action also consumes wealth; that plant from earlier is worth considerably less once it has passed through someone's bowels. To keep its economy in good order, a society has to be continually exerting itself in the production of more wealth than it consumes.
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On July 13 2011 02:01 mads wrote:Show nested quote +On July 12 2011 07:38 Bibdy wrote:
I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment).
After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. This is false, I suggest taking macroeconomics at a university level if this stuff interests you. I don't want to get sucked into this ongoing argument, but I couldn't help myself with this post. I hate people who oversimplify to make their point, and even worse when their oversimplification makes no sense whatsoever. The market, in this example, consists of at least 300$. The value of that 300$ is ambiguous.
hm what are you trying to say with this?
how is it working in you opinon?
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On July 13 2011 02:01 mads wrote:Show nested quote +On July 12 2011 07:38 Bibdy wrote:
I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment).
After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. This is false, I suggest taking macroeconomics at a university level if this stuff interests you. I don't want to get sucked into this ongoing argument, but I couldn't help myself with this post. I hate people who oversimplify to make their point, and even worse when their oversimplification makes no sense whatsoever. The market, in this example, consists of at least 300$. The value of that 300$ is ambiguous.
I like how I asked for a reasonable explanation at the end, but you go ahead and remove that part, then go and claim you hate people like me who realize that they might have a warped view of the situation, but are asking for clarification. Thanks for that.
And, your solution is seriously to go start a 3rd degree to learn macroeconomics at a university level, just to help facilitate my understanding of the world outside of my chosen profession?
I'm interested, but I'm not THAT fucking interested.
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well what my and other country that had crisis is doing, is just stablizing and trying to get as good economics as they can, cause if they dont, and if greece goes down the whole europe goes down, and those who talk from USA, you know nothing cause you never had a real crisis in youre country! my country will go down i think, cause theyre planning to associate and build an atom electrostation and go to euro, so thats pretty much shitty! but i hope that euro doesnt go down, cause if it does, the whole world will go down! believe me, no europe no import for russia, asia and USA!
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On July 12 2011 06:20 Gaga wrote:Show nested quote +On July 12 2011 06:18 vlf wrote:
Goes to show how much you know about currency when you start off by bashing the monetary system whilst concluding that it should have its value derived by governments. For your information, that IS how most currencies operate nowadays - the only inherent value of the coins and paper you hold is as legal tender, there's no convertibility. If there's no interest, there's no point in saving which would generate a very inefficient allocation of resources, i.e. good luck building anything bigger than a condo.
I wish people would at least read up a bit before commenting on serious issues with baseless rhetoric, asinine assumptions and downright demagogy. i am not speaking of value. The value of the money is our economy as a whole and the trust of markets that it can generate profits to pay debt. goverment is just a player in that it makes important decisions. commercial banks (create most of our money) and central banks are not the goverment. The FED in the US is a private corporation. Goverment allows the bank to create money, thats all they do. why the fuck would the goverment need to lend money if they could create it ? just to give some sources: http://en.wikipedia.org/wiki/Money_creationIn economics, money creation is the process by which the money supply of a country or a monetary zone (such as the Eurozone) is expanded. There are two principal stages of money creation. First, the central bank can introduce or issue new money into the economy (termed 'expansionary monetary policy'). A central bank usually injects new money into the economy by purchasing financial assets. Second, the new money introduced by the central bank is multiplied by commercial banks through fractional reserve banking, expanding the amount of broad money (i.e. cash plus demand deposits) in the economy by making loans.
If they create money they create inflation. When inflation gets out of certain limits the lifestyle of the people involved goes down more then it would by making an easily payable loan.
And in pretty much all the EU countries the central banks (banks that can print money) are controlled by either the gov either various EU organisations.
Simple as that.
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Y'all should just invest heavily in Canadian dollars... doing pretty well on the global scene. Doesn't seem to be affected by this euro business either (at least on the surface; time will tell).
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On July 13 2011 02:06 nemo14 wrote:Show nested quote +On July 12 2011 07:38 Bibdy wrote:On July 12 2011 07:18 vlf wrote:
For the last time, there's a difference. I have a problem with what you call "creating money" as you're applying the definition erroneously. You're using broadness and ambiguity to reiterate baseless anti-banking propaganda.
Nevermind, it's like talking to a brick wall. I've already explained how the system works, I do NOT need YOU to enlighten me on this issue. You're repeating certain things I said without understanding the simple differences and fine intricacies of the system, do you even realize this? What you're doing is parroting information without actually understanding the ramifications of the whole system, what they entail and just how sensitive they are.
I'm not about to try and teach market economics to someone who believes interest rates should be abolished and doesn't understand the basic principles of fiat currency. Even the questions you posed oozed unfamiliarity with the topic, yet you still try to lecture me on the subject. Sigh. I'm kind of in his boat, too. I think it's a huge problem and it's only going to get worse as things keep ramping up exponentially. I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment). After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. Big corporations that are producing things like iPads, turning a cheap amount of real-world materials into something far more expensive than the sum of the parts, or artists producing heavily-sought-after pieces of art, are creating value out of essentially nothing, which (I imagine) is supposed to match how money comes out of nowhere. But, I don't think the world is going to keep up with a pace like that. Peak Oil is going to be a pretty big moment in our monetary future. This is how I currently think of the whole monetary situation in my head. I'm hoping I've just made some people truly wise in the nature of economics blow a gasket with my grosse oversimplification who will take the time to correct me, because the situation looks pretty bleak from where I'm standing. You just demonstrated a perfect understanding of the solution to the problem you think you see. It is possible to create wealth by giving order to disordered bits and bobs; soil, water, and sunlight can be arranged into a plant, which is worth much more to a person than that dirt, water, and sunshine were. Thus a farmer can spend some of his time creating wealth and then use that wealth to improve his own life in some way. The same goes for everyone else who works in the private sector. Without wealth creation, you cannot have an economy because everyone who performs any kind of action also consumes wealth; that plant from earlier is worth considerably less once it has passed through someone's bowels. To keep its economy in good order, a society has to be continually exerting itself in the production of more wealth than it consumes.
Well that's nice to hear, though my concern is less about where the money comes from, and more about the exponential growth of wealth relative to the world being finite in it's resources. What happens when we hit Peak Oil? I think the economic world is finally going to realize that exponential growth of production is just not possible. But, hey, at least there will be economic reasons for going back into space!
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On July 13 2011 02:25 Bibdy wrote:Show nested quote +On July 13 2011 02:06 nemo14 wrote:On July 12 2011 07:38 Bibdy wrote:On July 12 2011 07:18 vlf wrote:
For the last time, there's a difference. I have a problem with what you call "creating money" as you're applying the definition erroneously. You're using broadness and ambiguity to reiterate baseless anti-banking propaganda.
Nevermind, it's like talking to a brick wall. I've already explained how the system works, I do NOT need YOU to enlighten me on this issue. You're repeating certain things I said without understanding the simple differences and fine intricacies of the system, do you even realize this? What you're doing is parroting information without actually understanding the ramifications of the whole system, what they entail and just how sensitive they are.
I'm not about to try and teach market economics to someone who believes interest rates should be abolished and doesn't understand the basic principles of fiat currency. Even the questions you posed oozed unfamiliarity with the topic, yet you still try to lecture me on the subject. Sigh. I'm kind of in his boat, too. I think it's a huge problem and it's only going to get worse as things keep ramping up exponentially. I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment). After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. Big corporations that are producing things like iPads, turning a cheap amount of real-world materials into something far more expensive than the sum of the parts, or artists producing heavily-sought-after pieces of art, are creating value out of essentially nothing, which (I imagine) is supposed to match how money comes out of nowhere. But, I don't think the world is going to keep up with a pace like that. Peak Oil is going to be a pretty big moment in our monetary future. This is how I currently think of the whole monetary situation in my head. I'm hoping I've just made some people truly wise in the nature of economics blow a gasket with my grosse oversimplification who will take the time to correct me, because the situation looks pretty bleak from where I'm standing. You just demonstrated a perfect understanding of the solution to the problem you think you see. It is possible to create wealth by giving order to disordered bits and bobs; soil, water, and sunlight can be arranged into a plant, which is worth much more to a person than that dirt, water, and sunshine were. Thus a farmer can spend some of his time creating wealth and then use that wealth to improve his own life in some way. The same goes for everyone else who works in the private sector. Without wealth creation, you cannot have an economy because everyone who performs any kind of action also consumes wealth; that plant from earlier is worth considerably less once it has passed through someone's bowels. To keep its economy in good order, a society has to be continually exerting itself in the production of more wealth than it consumes. Well that's nice to hear, though my concern is less about where the money comes from, and more about the exponential growth of wealth relative to the world being finite in it's resources. What happens when we hit Peak Oil? I think the economic world is finally going to realize that exponential growth of production is just not possible. But, hey, at least there will be economic reasons for going back into space!
exactly that.
our money system would work fine if wealth creation could grow exponantially too. But i don't think thats possible and everyone who has some basic understanding of the exponential graph should realize why.
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On July 13 2011 03:05 Gaga wrote:Show nested quote +On July 13 2011 02:25 Bibdy wrote:On July 13 2011 02:06 nemo14 wrote:On July 12 2011 07:38 Bibdy wrote:On July 12 2011 07:18 vlf wrote:
For the last time, there's a difference. I have a problem with what you call "creating money" as you're applying the definition erroneously. You're using broadness and ambiguity to reiterate baseless anti-banking propaganda.
Nevermind, it's like talking to a brick wall. I've already explained how the system works, I do NOT need YOU to enlighten me on this issue. You're repeating certain things I said without understanding the simple differences and fine intricacies of the system, do you even realize this? What you're doing is parroting information without actually understanding the ramifications of the whole system, what they entail and just how sensitive they are.
I'm not about to try and teach market economics to someone who believes interest rates should be abolished and doesn't understand the basic principles of fiat currency. Even the questions you posed oozed unfamiliarity with the topic, yet you still try to lecture me on the subject. Sigh. I'm kind of in his boat, too. I think it's a huge problem and it's only going to get worse as things keep ramping up exponentially. I think of it this way: Let's say the world only consists of me, a banker who has $100 and a market that produces food (terribly simplistic, but stick with me). I take out a loan for $100 and pay my food bill to the market for food for a week. Let's say I'm also the guy working for the market and my salary for that week is $100, which I pay back to the Bank (let's just ignore the fact that I could just make my own food for nothing and eat it, for the moment). After that week is up, I've got to pay an interest of say, $5. Well, where does the $5 come from? I've basically got to go out into the world and find/dig up/create something worth $5 and give that to the bank to make up the difference. The market couldn't pay me $105, because it didn't have $105 itself. Only the $100 that I was paying it for the food. So, $5 has to magically come out of nowhere from the world around me, or I invent something of value (turning something simple like sand, into a glass sculpture that has artistic value, for example - but if there is only $100 in the world between me, the banker and the supermarket, doesn't someone else with $5 have to enter the picture?). On an epic scale as large as our planet, where money doesn't really exist as a tangible thing, but merely a debt to be paid, something of monetary value to pay back that debt has to keep coming from the world around us. And as the money keeps getting relent over and over again, it becomes an exponential situation. Big corporations that are producing things like iPads, turning a cheap amount of real-world materials into something far more expensive than the sum of the parts, or artists producing heavily-sought-after pieces of art, are creating value out of essentially nothing, which (I imagine) is supposed to match how money comes out of nowhere. But, I don't think the world is going to keep up with a pace like that. Peak Oil is going to be a pretty big moment in our monetary future. This is how I currently think of the whole monetary situation in my head. I'm hoping I've just made some people truly wise in the nature of economics blow a gasket with my grosse oversimplification who will take the time to correct me, because the situation looks pretty bleak from where I'm standing. You just demonstrated a perfect understanding of the solution to the problem you think you see. It is possible to create wealth by giving order to disordered bits and bobs; soil, water, and sunlight can be arranged into a plant, which is worth much more to a person than that dirt, water, and sunshine were. Thus a farmer can spend some of his time creating wealth and then use that wealth to improve his own life in some way. The same goes for everyone else who works in the private sector. Without wealth creation, you cannot have an economy because everyone who performs any kind of action also consumes wealth; that plant from earlier is worth considerably less once it has passed through someone's bowels. To keep its economy in good order, a society has to be continually exerting itself in the production of more wealth than it consumes. Well that's nice to hear, though my concern is less about where the money comes from, and more about the exponential growth of wealth relative to the world being finite in it's resources. What happens when we hit Peak Oil? I think the economic world is finally going to realize that exponential growth of production is just not possible. But, hey, at least there will be economic reasons for going back into space! exactly that. our money system would work fine if wealth creation could grow exponantially too. But i don't think thats possible and everyone who has some basic understanding of the exponential graph should realize why.
oh lol, you got that from a youtube video too, I've seen the same one. Just so you know, economic growth is also measured exponentially so what you are saying is that our money system is fine. I have the feeling that is not what you wanted to say :D
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EPT
