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Valhalla18444 Posts
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i'll watch it and report back tomorrow
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lol
i like ghastly as an adjective
maybe i'll take you up on this
timewise tho i don't have a lot of it.
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I watched about 30 mins of this and my brain is about to explode.
MONEY =/= DEBT
Accounting 101 do you know it?
Assets = Liability + Stockholder's Equity.
If business is active, the banks with excess reserves probably will have opportunities to loan the $9,000. Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000.
This quote from the video is taken COMPLETELY out of context. The text is viewing the banking system as one collective whole to which the Fed lends, so that $9,000 is money that is input to the system as a whole. Also, the Fed does not lend like commercial lending, the Fed credits the fractional reserve of a designated bank, so if the bank hands out loans from it's deposit account, rather than the excess from the reserve, money would DISAPPEAR from the system.
Spend two hours reading this instead of watching that stupid video.
http://www.fdrs.org/modern_money_mechanics.html#1 When
They are actually comparing it to slavery LOL?
P.S. Gonna finish the video for hilarity.
HAHAHA, they are against privatization? OH LAWD
ROFL YOU CAN'T BE SERIOUS. They are now taking a stance against trade. That's right, fight corporate competition!
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On October 05 2008 16:52 mahnini wrote:I watched about 30 mins of this and my brain is about to explode. MONEY =/= DEBT Accounting 101 do you know it? Assets = Liability + Stockholder's Equity. Show nested quote +If business is active, the banks with excess reserves probably will have opportunities to loan the $9,000. Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. This quote from the video is taken COMPLETELY out of context. The text is viewing the banking system as one collective whole to which the Fed lends, so that $9,000 is money that is input to the system as a whole. Also, the Fed does not lend like commercial lending, the Fed credits the fractional reserve of a designated bank, so if the bank hands out loans from it's deposit account, rather than the excess from the reserve, money would DISAPPEAR from the system. Spend two hours reading this instead of watching that stupid video. http://www.fdrs.org/modern_money_mechanics.html#1 WhenThey are actually comparing it to slavery LOL? P.S. Gonna finish the video for hilarity.
Could you clarify? I can't understand what you are saying. Its not controversial that money is debt.
http://en.wikipedia.org/wiki/Money_creation#Money_multiplier
If you look at the graph to the right, the original $100 is money, and the additional $900 created by loans from banks is debt, in other words its money type #2 here,
http://en.wikipedia.org/wiki/Money_supply#Fractional-reserve_banking
that site you linked to is actually a conspiracy site, lol
http://www.fdrs.org/money_creation.html
edit: btw mahnini, if the first 30 minutes are that rough on you, the last half of the movie will blow you away
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On October 05 2008 17:16 fight_or_flight wrote:Show nested quote +On October 05 2008 16:52 mahnini wrote:I watched about 30 mins of this and my brain is about to explode. MONEY =/= DEBT Accounting 101 do you know it? Assets = Liability + Stockholder's Equity. If business is active, the banks with excess reserves probably will have opportunities to loan the $9,000. Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. This quote from the video is taken COMPLETELY out of context. The text is viewing the banking system as one collective whole to which the Fed lends, so that $9,000 is money that is input to the system as a whole. Also, the Fed does not lend like commercial lending, the Fed credits the fractional reserve of a designated bank, so if the bank hands out loans from it's deposit account, rather than the excess from the reserve, money would DISAPPEAR from the system. Spend two hours reading this instead of watching that stupid video. http://www.fdrs.org/modern_money_mechanics.html#1 WhenThey are actually comparing it to slavery LOL? P.S. Gonna finish the video for hilarity. Could you clarify? I can't understand what you are saying. Its not controversial that money is debt. http://en.wikipedia.org/wiki/Money_creation#Money_multiplierIf you look at the graph to the right, the original $100 is money, and the additional $900 created by loans from banks is debt, in other words its money type #2 here, http://en.wikipedia.org/wiki/Money_supply#Fractional-reserve_bankingthat site you linked to is actually a conspiracy site, lol http://www.fdrs.org/money_creation.htmledit: btw mahnini, if the first 30 minutes are that rough on you, the last half of the movie will blow you away
hey, how about when you buy food. you pay the guy money, you eat the food, then it's gone. does that mean, as a result of you eating the food, money was created in the system?
OH SHIT EVERYONE STOP EATING, EATING = DEBT
my point is just because the bank is selling an intangible service for profit doesnt mean money = debt. just like the guy who made your food makes profit from the actual making of food which in and of itself holds no value.
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Money is only created if you buy that food on a credit card. The only way money is created is if its borrowed. This is because the bank loans out money based by backing the loan with someone else's deposits.
I deposit $100, the bank loans out $90. Someone else deposits $90, the bank loans out $81, so on and so forth. This is a geometric sum, which adds up the the money multiplier from the wiki entry.
edit:
The problem is that they collect interest on that money. Just increasing the money supply isn't necessarily a bad thing. But, since the money supply is actually based on loans, it must be paid back with interest. But how do you pay the entire money supply back with interest? It is all the money in existence after all......the answer is that more people must take out loans to increase the money supply. So the money supply increases exponentially, which is unsustainable. See graph below for real data. Note: only currency is not debt-money.
http://en.wikipedia.org/wiki/Money_supply#Fractional-reserve_banking
The fed stopped publishing M3 in 2006.
What happens when it stops increasing exponentially? That means people are defaulting on their loans.
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On October 05 2008 17:48 fight_or_flight wrote:This man later changed his mind. (see first link in the OP for the discussion) Anyways, money is only created if you buy that food on a credit card. The only way money is created is if its borrowed. This is because the bank loans out money based by backing the loan with someone else's deposits. I deposit $100, the bank loans out $90. Someone else deposits $90, the bank loans out $81, so on and so forth. This is a geometric sum, which adds up the the money multiplier from the wiki entry. edit: The problem is that they collect interest on that money. Just increasing the money supply isn't necessarily a bad thing. But, since the money supply is actually based on loans, it must be paid back with interest. But how do you pay the entire money supply back with interest? It is all the money in existence after all......the answer is that more people must take out loans to increase the money supply. So the money supply increases exponentially, which is unsustainable. See graph below for real data. The fed stopped publishing M3 in 2006. What happens when it stops increasing exponentially? That means people are defaulting on their loans.
They charge interest for the money because the interest is their REVENUE for their SERVICE as well as opportunity cost. you see, people who give out the loans needs money too. so does the electric company which powers the servers,, water, lights, a/c, etc, etc. they arent creating money, the money is being paid for a SERVICE that they are providing. YOu pay the guy for the food supplies, as well as for his SERVICE of making the food.
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It was a really good movie. Compared to the first movie, it is more focused and it builds up to a broad singular message. Basically, the current monetary system is the root of every problem, and only when it's gone can we achieve "utopia" -- sustainable, resource-based, unbiased world. Of course it's idealistic and alarmist but that's what a good persuasive documentary is supposed to be like, IMO.
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On October 05 2008 18:03 mahnini wrote:Show nested quote +On October 05 2008 17:48 fight_or_flight wrote:On October 01 2008 16:39 ahrara_ wrote:
I'M JUST SAYING YOUR MOMMA = DEBT. This man later changed his mind. (see first link in the OP for the discussion) Anyways, money is only created if you buy that food on a credit card. The only way money is created is if its borrowed. This is because the bank loans out money based by backing the loan with someone else's deposits. I deposit $100, the bank loans out $90. Someone else deposits $90, the bank loans out $81, so on and so forth. This is a geometric sum, which adds up the the money multiplier from the wiki entry. edit: The problem is that they collect interest on that money. Just increasing the money supply isn't necessarily a bad thing. But, since the money supply is actually based on loans, it must be paid back with interest. But how do you pay the entire money supply back with interest? It is all the money in existence after all......the answer is that more people must take out loans to increase the money supply. So the money supply increases exponentially, which is unsustainable. See graph below for real data. The fed stopped publishing M3 in 2006. What happens when it stops increasing exponentially? That means people are defaulting on their loans. They charge interest for the money because the interest is their REVENUE for their SERVICE as well as opportunity cost. you see, people who give out the loans needs money too. so does the electric company which powers the servers,, water, lights, a/c, etc, etc. The money isn't disappearing, the money is being paid for a SERVICE that they are providing. YOu pay the guy for the food supplies, as well as for his SERVICE of making the food.
Yes.
But they aren't loaning out their money......they are loaning out other people's money. This greatly magnifies their power and causes the money system shown in that data. The money supply is like 50 or 60 trillion right now. I'm not saying making loans is a bad thing, but by loaning out other people's money, basically "creating money out of thin air", it causes a vicous cycle of new money needing to constantly be created at an exponential rate.
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what this video does is encourage massive ignorance and stupidity.
it goes from high school understanding of economics, to 15 year olds opinion of economic systems, to nut cases conspiracy of some crazy shit.
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Hey, I was posting this stuff before the movie came out.
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On October 05 2008 18:10 fight_or_flight wrote:Show nested quote +On October 05 2008 18:03 mahnini wrote:On October 05 2008 17:48 fight_or_flight wrote:On October 01 2008 16:39 ahrara_ wrote:
I'M JUST SAYING YOUR MOMMA = DEBT. This man later changed his mind. (see first link in the OP for the discussion) Anyways, money is only created if you buy that food on a credit card. The only way money is created is if its borrowed. This is because the bank loans out money based by backing the loan with someone else's deposits. I deposit $100, the bank loans out $90. Someone else deposits $90, the bank loans out $81, so on and so forth. This is a geometric sum, which adds up the the money multiplier from the wiki entry. edit: The problem is that they collect interest on that money. Just increasing the money supply isn't necessarily a bad thing. But, since the money supply is actually based on loans, it must be paid back with interest. But how do you pay the entire money supply back with interest? It is all the money in existence after all......the answer is that more people must take out loans to increase the money supply. So the money supply increases exponentially, which is unsustainable. See graph below for real data. The fed stopped publishing M3 in 2006. What happens when it stops increasing exponentially? That means people are defaulting on their loans. They charge interest for the money because the interest is their REVENUE for their SERVICE as well as opportunity cost. you see, people who give out the loans needs money too. so does the electric company which powers the servers,, water, lights, a/c, etc, etc. The money isn't disappearing, the money is being paid for a SERVICE that they are providing. YOu pay the guy for the food supplies, as well as for his SERVICE of making the food. Yes. But they aren't loaning out their money......they are loaning out other people's money. This greatly magnifies their power and causes the money system shown in that data. The money supply is like 50 or 60 trillion right now. I'm not saying making loans is a bad thing, but by loaning out other people's money, basically "creating money out of thin air", it causes a vicous cycle of new money needing to constantly be created at an exponential rate.
you aren't getting man. they are providing a SERVICE. you know those vaults they had to build, security they hire, security cameras, networks they build, network security, computers, software, employees, etc,etc,etc.
all this shit requires money. they also need profit. how is this creating money. all the money eventually goes back into the system.
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On October 05 2008 18:17 mahnini wrote:how is this creating money. all the money eventually goes back into the system.
Read the wikipedia articles about money creating. The fed doesn't create money (well, only a small %), private banks create money in the fractional reserve system.
edit: at interest
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On October 05 2008 18:24 fight_or_flight wrote:Show nested quote +On October 05 2008 18:17 mahnini wrote:how is this creating money. all the money eventually goes back into the system. Read the wikipedia articles about money creating. The fed doesn't create money (well, only a small %), private banks create money in the fractional reserve system.
you are SUCH an idiot.
by your definition anybody doing any kind of service is creating money. i knew a guy in elementary school who at bugs and shit for money. he didn't even have starting capital, he ate bugs and people gave him money. did he create money?
the guy who bags your groceries, did he create money? indian IT guy on the phone? guy who mows lawns? mailman? teachers?
THESE ARE ALL SERVICES, YOU PAY AN AMOUNT OF MONEY BUT GET NOTHING TANGIBLE IN RETURN. OMFG EVERYONE IS CREATING MONEY.
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On October 05 2008 18:30 mahnini wrote:Show nested quote +On October 05 2008 18:24 fight_or_flight wrote:On October 05 2008 18:17 mahnini wrote:how is this creating money. all the money eventually goes back into the system. Read the wikipedia articles about money creating. The fed doesn't create money (well, only a small %), private banks create money in the fractional reserve system. you are SUCH an idiot. by your definition anybody doing any kind of service is creating money. i knew a guy in elementary school who at bugs and shit for money. he didn't even have starting capital, he ate bugs and people gave him money. did he create money? the guy who bags your groceries, did he create money? indian IT guy on the phone? guy who mows lawns? mailman? teachers? THESE ARE ALL SERVICES, YOU PAY AN AMOUNT OF MONEY BUT GET NOTHING TANGIBLE IN RETURN. OMFG EVERYONE IS CREATING MONEY.
edit: don't want to be an asshole, but come on man.... you are on the verge of understanding. Third line of the wikipedia article on money creation.
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On October 05 2008 18:37 fight_or_flight wrote:Show nested quote +On October 05 2008 18:30 mahnini wrote:On October 05 2008 18:24 fight_or_flight wrote:On October 05 2008 18:17 mahnini wrote:how is this creating money. all the money eventually goes back into the system. Read the wikipedia articles about money creating. The fed doesn't create money (well, only a small %), private banks create money in the fractional reserve system. you are SUCH an idiot. by your definition anybody doing any kind of service is creating money. i knew a guy in elementary school who at bugs and shit for money. he didn't even have starting capital, he ate bugs and people gave him money. did he create money? the guy who bags your groceries, did he create money? indian IT guy on the phone? guy who mows lawns? mailman? teachers? THESE ARE ALL SERVICES, YOU PAY AN AMOUNT OF MONEY BUT GET NOTHING TANGIBLE IN RETURN. OMFG EVERYONE IS CREATING MONEY. print-screened for posterity
eat a dick retard
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I have watched most of this and of course it is quite accurate. There is one correction that i would make however, its more of a clarification really. This movie implies that the World Bank and the International Monetary Fund were created as an instrument of devious interests. In fact both these institutions were great in their conception and in their purpose.
They were basically the children of the famous economist Keynes (his policies are sorely missed today and this is a serious problem for the American economic system today). They were created to help out developing countries.
This was all well and good until whacked out America fanatic ideological zealots of economists managed to take over these institutions and used them to force their economic ideology onto developing nations who's economies promptly rolled over and died, the fate awaiting any unfortunate enough to wear their oppressive burden.
These same policies have been implemented in the United States particularly under the Bush administration and it is neither a surprise for a coincidence their economy is in serious trouble today.
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Even though this movie was supposed to make me hate our banking system, I fell in love with it. It is wonderful. Thank you zeitgeist, you opened my eyes to how wonderful morden money mechanics are.
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Oh goody! More whacko bullshit!
Im surprised this crap didnt get closed yet
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On October 05 2008 17:48 fight_or_flight wrote:This man later changed his mind. (see first link in the OP for the discussion) Anyways, money is only created if you buy that food on a credit card. The only way money is created is if its borrowed. This is because the bank loans out money based by backing the loan with someone else's deposits. I deposit $100, the bank loans out $90. Someone else deposits $90, the bank loans out $81, so on and so forth. This is a geometric sum, which adds up the the money multiplier from the wiki entry. edit: The problem is that they collect interest on that money. Just increasing the money supply isn't necessarily a bad thing. But, since the money supply is actually based on loans, it must be paid back with interest. But how do you pay the entire money supply back with interest? It is all the money in existence after all......the answer is that more people must take out loans to increase the money supply. So the money supply increases exponentially, which is unsustainable. See graph below for real data. Note: only currency is not debt-money. http://en.wikipedia.org/wiki/Money_supply#Fractional-reserve_bankingThe fed stopped publishing M3 in 2006. What happens when it stops increasing exponentially? That means people are defaulting on their loans.
No. no. no. i only changed my mind about YOUR MOMMA.
Please do not ascribe to me opinions that I do not have. My dignity is at stake!
P.S. Mahnini is so cute when he's angry lolll
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On October 06 2008 00:56 Hawk wrote:
Oh goody! More whacko bullshit!
Im surprised this crap didnt get closed yet
for the record tho, this is not just *whacko bullshit*. it's presented in a terribly retarded and ghastly way, but the ideas backing fight's critique of the modern banking system are quite sophisticated to the point I don't think anyone has a really good grasp of them in this thread. and i mean ANYONE.
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On October 05 2008 18:30 mahnini wrote:Show nested quote +On October 05 2008 18:24 fight_or_flight wrote:On October 05 2008 18:17 mahnini wrote:how is this creating money. all the money eventually goes back into the system. Read the wikipedia articles about money creating. The fed doesn't create money (well, only a small %), private banks create money in the fractional reserve system. you are SUCH an idiot. by your definition anybody doing any kind of service is creating money. i knew a guy in elementary school who at bugs and shit for money. he didn't even have starting capital, he ate bugs and people gave him money. did he create money? the guy who bags your groceries, did he create money? indian IT guy on the phone? guy who mows lawns? mailman? teachers? THESE ARE ALL SERVICES, YOU PAY AN AMOUNT OF MONEY BUT GET NOTHING TANGIBLE IN RETURN. OMFG EVERYONE IS CREATING MONEY.
lol
i wanna pinch your cheeks
c'mere cutie
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On October 06 2008 01:39 ahrara_ wrote:Show nested quote +On October 06 2008 00:56 Hawk wrote:
Oh goody! More whacko bullshit!
Im surprised this crap didnt get closed yet for the record tho, this is not just *whacko bullshit*. it's presented in a terribly retarded and ghastly way, but the ideas backing fight's critique of the modern banking system are quite sophisticated to the point I don't think anyone has a really good grasp of them in this thread. and i mean ANYONE.
No. It is COMPLETELY WRONG. DID YOU SEE MY FIRST POST? HAVE ANY OF YOU READ THE MODERN MONEY MECHANICS TEXT THAT I LINK? OF ARE ALL OF YOU PULLING SHIT OUT OF YOUR ASSES. I'M NOT ARGUING THE FACT THAT THE FED INJECTION CAUSES MORE MONEY TO BE PUT INTO CIRCULATION BUT IT IS NOT MONEY CREATION. IT IS A TRICKLE DOWN EFFECT OF INITIAL FED CREDIT (THIS IS ACCOUNTING CREDIT AND I'M NOT EXPLAINING TO YOU TARDS ANYMORE) -> LOAN -> DEPOSIT -> LOAN -> DEPOSIT-> ETC
THE MONEY IS TRICKLING DOWN DUE TO THE FRACTIONAL RESERVE SYSTEM OF HOLDING 10% PER TRANSACTION ACCOUNT. QUITE SOPHISTICATED? YOU MEAN MY REBUTTAL IN THE FIRST POST WHICH NO ONE ADDRESS AND NO ONE CURRENT IN THIS THREAD EVEN UNDERSTANDS IS INCORRECT? LOL?
MONEY IS "CREATED" WHEN THE FED BUYS US BONDS AND INJECTS MONEY INTO THE SYSTEM, THIS IS HOW MONEY SUPPLY IS MANAGED. MONEY IS NOT CREATED THROUGH INTEREST WHICH IS ESSENTIALLY A FEE FOR SERVICE.
I'M NOT CLAIMING TO BE THE KNOW ALL TELL ALL BUT I KNOW ENOUGH TO SEE BULLSHIT AND RETARDS WHEN I SEE THEM.
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hahaha mahini for the lulz.
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On October 06 2008 01:54 mahnini wrote:Show nested quote +On October 06 2008 01:39 ahrara_ wrote:On October 06 2008 00:56 Hawk wrote:
Oh goody! More whacko bullshit!
Im surprised this crap didnt get closed yet for the record tho, this is not just *whacko bullshit*. it's presented in a terribly retarded and ghastly way, but the ideas backing fight's critique of the modern banking system are quite sophisticated to the point I don't think anyone has a really good grasp of them in this thread. and i mean ANYONE. No. It is COMPLETELY WRONG. DID YOU SEE MY FIRST POST? HAVE ANY OF YOU READ THE MODERN MONEY MECHANICS TEXT THAT I LINK? OF ARE ALL OF YOU PULLING SHIT OUT OF YOUR ASSES. I'M NOT ARGUING THE FACT THAT THE FED INJECTION CAUSES MORE MONEY TO BE PUT INTO CIRCULATION BUT IT IS NOT MONEY CREATION. IT IS A TRICKLE DOWN EFFECT OF INITIAL FED CREDIT (THIS IS ACCOUNTING CREDIT AND I'M NOT EXPLAINING TO YOU TARDS ANYMORE) -> LOAN -> DEPOSIT -> LOAN -> DEPOSIT-> ETC THE MONEY IS TRICKLING DOWN DUE TO THE FRACTIONAL RESERVE SYSTEM OF HOLDING 10% PER TRANSACTION ACCOUNT. QUITE SOPHISTICATED? YOU MEAN MY REBUTTAL IN THE FIRST POST WHICH NO ONE ADDRESS AND NO ONE CURRENT IN THIS THREAD EVEN UNDERSTANDS IS INCORRECT? LOL? MONEY IS "CREATED" WHEN THE FED BUYS US BONDS AND INJECTS MONEY INTO THE SYSTEM, THIS IS HOW MONEY SUPPLY IS MANAGED. MONEY IS NOT CREATED THROUGH INTEREST WHICH IS ESSENTIALLY A FEE FOR SERVICE. I'M NOT CLAIMING TO BE THE KNOW ALL TELL ALL BUT I KNOW ENOUGH TO SEE BULLSHIT AND RETARDS WHEN I SEE THEM.
*stroke*
and for the record i've said everything you posted already in my other thread
it's a substantive debate that you are dismissing out of hand
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On October 06 2008 01:54 mahnini wrote:
MONEY IS "CREATED" WHEN THE FED BUYS US BONDS AND INJECTS MONEY INTO THE SYSTEM, THIS IS HOW MONEY SUPPLY IS MANAGED.
The money supply is actually managed by the fed changing interest rates....thats why you hear about them all the time. The interest rates control the ability of banks to make loans, which controls the money supply.
On October 06 2008 01:54 mahnini wrote:
IT IS NOT MONEY CREATION. IT IS A TRICKLE DOWN EFFECT OF INITIAL FED CREDIT (THIS IS ACCOUNTING CREDIT AND I'M NOT EXPLAINING TO YOU TARDS ANYMORE) -> LOAN -> DEPOSIT -> LOAN -> DEPOSIT-> ETC
THE MONEY IS TRICKLING DOWN DUE TO THE FRACTIONAL RESERVE SYSTEM OF HOLDING 10% PER TRANSACTION ACCOUNT. QUITE SOPHISTICATED?
But you are missing the trick. Since interest is collected on all that money, it is not simply a trickle-down, or constant money multiplier. Because all that trickled down money must be paid back with interest.
So if more new money isn't created, perpetually, people default on their loans. If it was just a constant multiplier (or lets say, a multiplier with no side effects) that would be entirely different.
edit: http://en.wikipedia.org/wiki/Money_creation
FTA:
Money creation is the process by which money is produced or issued. There are two different ways to create money:
* manufacturing a new monetary unit, such as paper currency or metal coins (money creation)
* loaning out a physical monetary unit multiple times through fractional-reserve lending (credit creation)
Coins are produced by manufacturing metal in a factory called a mint.
Banknotes and bank account balances are financial securities issued by a bank.
Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back.
The practices and regulation of production, issue and redemption of money is of central concern to monetary economics (e.g. monetarism), and affect the operation of financial markets and the purchasing power of money.
In modern economies, relatively little of the money supply is in currency (i.e. coins and banknotes); most is created through lending.
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Ok, let's get this out of the way first. Upon further reading and speaking to someone who knew what they were talking about, I admit that I was wrong about banks creating money. However, as far as I understand it now, money is not created out of thin air. Money is created through securities that can also be sold at value. So when banks create a loan contract, the contract itself is worth the money that was lent + profit and the money lent out is now the "created" money in the market. When the loan is paid off, the created money disappears from the system. However, this is completely different from what the video was implying. Correct me if I'm wrong.
On October 06 2008 05:39 fight_or_flight wrote:Show nested quote +On October 06 2008 01:54 mahnini wrote:
MONEY IS "CREATED" WHEN THE FED BUYS US BONDS AND INJECTS MONEY INTO THE SYSTEM, THIS IS HOW MONEY SUPPLY IS MANAGED. The money supply is actually managed by the fed changing interest rates....thats why you hear about them all the time. The interest rates control the ability of banks to make loans, which controls the money supply.
Correct, these are both ways of regulating money supply.
Show nested quote +On October 06 2008 01:54 mahnini wrote:
IT IS NOT MONEY CREATION. IT IS A TRICKLE DOWN EFFECT OF INITIAL FED CREDIT (THIS IS ACCOUNTING CREDIT AND I'M NOT EXPLAINING TO YOU TARDS ANYMORE) -> LOAN -> DEPOSIT -> LOAN -> DEPOSIT-> ETC
THE MONEY IS TRICKLING DOWN DUE TO THE FRACTIONAL RESERVE SYSTEM OF HOLDING 10% PER TRANSACTION ACCOUNT. QUITE SOPHISTICATED? But you are missing the trick. Since interest is collected on all that money, it is not simply a trickle-down, or constant money multiplier. Because all that trickled down money must be paid back with interest. So if more new money isn't created, perpetually, people default on their loans. If it was just a constant multiplier (or lets say, a multiplier with no side effects) that would be entirely different.
Look at interest as a static profit and see how little sense this makes.
P.S. The wiki article you keep linking does not explain money creation well at all.
P.P.S It's not necessarily that money is being created, rather something of value is being created as a placeholder for the owed money as a result of the loan that is equal to or greater than the loan itself, but the ability to sell this as a security is what enables the "creation" of more money.
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On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans.
However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high.
What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result.
This is why Thomas Jefferson said this:
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it.
Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (thats the inflation caused by interest on the money supply). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation part).
The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential.
edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets.
While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus.
How is it that Fannie May & Freddy Mac own like 70% of the mortgages? And when people don't pay they own the house? They didn't build the house, they didn't buy the land, they didn't do anything. They have no factories, no timber mills, nothing. All they do is move numbers around. How does the practice of moving numbers around create the houses they own?
It should be obvious now how a credit crisis causes everyone to default on their loans.
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the latter part of this is accurate. the beginning part about religion is poorly researched.
but it's funny how anything christian is banned and closed and flamed while anything anti christian gets revived from the dead.
it can be anything religious, so long as it's not christian. that's how to get threads survived on TL. you'd think that a protestant nation would be more inclined to at least letting the basics get word out. for being the largest protestant nation in the world, it's funny how this bias resonates in the nation, even outside of TL.
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great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics.
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On October 06 2008 07:09 fight_or_flight wrote:Show nested quote +On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus.
This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing).
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Exactly, the fractional reserve system causes the size of the money supply. The interest causes the growth of the money supply.
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On October 06 2008 07:45 babypo0 wrote:
great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics.
This is untrue and was exactly what the video wanted to implicate.
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On October 06 2008 07:47 mahnini wrote:Show nested quote +On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing).
But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks.
On October 06 2008 07:50 mahnini wrote:Show nested quote +On October 06 2008 07:45 babypo0 wrote:
great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics. This is untrue and was exactly what the video wanted to implicate.
Well not in a single transaction, but the banking system as a whole.
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On October 06 2008 07:51 fight_or_flight wrote:Show nested quote +On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks.
I understand that you pay off debt with money, I don't understand your point.
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On October 06 2008 07:51 fight_or_flight wrote:Show nested quote +On October 06 2008 07:50 mahnini wrote:On October 06 2008 07:45 babypo0 wrote:
great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics. This is untrue and was exactly what the video wanted to implicate. Well not in a single transaction, but the banking system as a whole.
That is still untrue.
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On October 06 2008 07:54 c wrote:Show nested quote +On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point.
You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral.
Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value.
But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation...
On October 06 2008 07:55 mahnini wrote:Show nested quote +On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:50 mahnini wrote:On October 06 2008 07:45 babypo0 wrote:
great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics. This is untrue and was exactly what the video wanted to implicate. Well not in a single transaction, but the banking system as a whole. That is still untrue.
Thats the money multiplier concept. Banks multiply the money by 1/reserve ratio. If the reserve ratio is 10%, they multiply the money by 10, hence the "thin air".
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On October 06 2008 08:02 fight_or_flight wrote:Show nested quote +On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value.
Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared.
But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation...
I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned.
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On October 06 2008 08:02 fight_or_flight wrote:Show nested quote +On October 06 2008 07:55 mahnini wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:50 mahnini wrote:On October 06 2008 07:45 babypo0 wrote:
great chart, mahnini. once you understand the tools and tricks, it's not hard to figure out how it works. i don't know what stops people from putting 2 and 2 together. they're more apt to believe things if the mainstream media resounds it with barely any substantiating facts, than being shows a plethora of history, facts, mechanisms, and charts.
one comment about interest rates controlling the money supply. while that is true, it would be a grave mistake to only point to interest rates. the real culprit is fractional reserve banking. if you hold 100, you can loan out 900 out of thin air, created. if there was no fractional reserve banking and 100 meant you can loan out 100, then no money would be created other than printing, counterfeiting, or if more stuff to back the dollar was found. thus with fractional reserve banking, interest rates control the rate of money supply expansion by simply affecting the amount of loans - meaning the amount that is created. it's not super complicated. you don't need to be a financial guru to understand the basics. This is untrue and was exactly what the video wanted to implicate. Well not in a single transaction, but the banking system as a whole. That is still untrue. Thats the money multiplier concept. Banks multiply the money by 1/reserve ratio. If the reserve ratio is 10%, they multiply the money by 10, hence the "thin air".
It is not out of thin air. The money is simply circulated through the system and as loans and deposits are made, the banks continually keeps 10% for each loan and subsequent deposit and are free to loan the rest out. Value is still held in the banks as a form of a liability to accounts.
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On October 06 2008 08:11 mahnini wrote:Show nested quote +On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared.
This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article:
http://en.wikipedia.org/wiki/Money_creation
"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back."
Show nested quote +But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned.
No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment or default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear?
http://en.wikipedia.org/wiki/Great_Depression#Debt
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On October 06 2008 08:35 fight_or_flight wrote:Show nested quote +On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." Show nested quote +But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt
This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought.
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On October 06 2008 08:51 mahnini wrote:Show nested quote +On October 06 2008 08:35 fight_or_flight wrote:On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought.
Yes, the bank holds the value. Then they liquidate it, extracting their money from the system. Once that money is extracted, they add it to their balance sheet to cover the debt, and it disappears.
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On October 06 2008 08:59 fight_or_flight wrote:Show nested quote +On October 06 2008 08:51 mahnini wrote:On October 06 2008 08:35 fight_or_flight wrote:On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:On October 06 2008 06:43 mahnini wrote:
Look at interest as a static profit and see how little sense this makes.
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans. However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high. What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result. This is why Thomas Jefferson said this: " I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it. Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation). The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential. edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets. While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought. Yes, the bank holds the value. Then they liquidate it, extracting their money from the system. Once that money is extracted, they add it to their balance sheet to cover the debt, and it disappears.
The money does not disappear. If the money from liquidation covers the loan the bank may net $0 but the money is still there sitting in someone's account debt free.
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On October 06 2008 09:15 mahnini wrote:Show nested quote +On October 06 2008 08:59 fight_or_flight wrote:On October 06 2008 08:51 mahnini wrote:On October 06 2008 08:35 fight_or_flight wrote:On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:On October 06 2008 07:09 fight_or_flight wrote:
[quote]
Lets say it is the bank's profit. Interest can be used for operating costs/profit/making more loans.
However, the same problem still exists. The banks collect interest on the money supply, and to pay it even more money must be borrowed. Thats how the M1/M2/M3 can be so insanely high.
What happens in a system like this is that eventually everyone is in debt to the banks. Sure, its used as their "static" (ever increasing) profit, but what that means is that eventually, in this closed system, banks will eventually end up owning everything. Its not that they're greedy (which they are), its simply the end result.
This is why Thomas Jefferson said this:
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
The founding fathers understood this simple concept. The rebellion against Britain was in large part about gaining freedom from their banks. That is why Andrew Jackson fought so hard against the Central Bank, and destroyed it.
Its this simple process of collecting interest on the money supply, which creates debt that can never be paid off (that causes the cycle which is inflation). The banks gain ever more collateral for that debt, until people can't repay (thats the deflation).
The current economic crisis is largely about people not being able to absorb new debt. When people can't absorb new debt, money creation stops, the interest cannot be repaid, and thats how it happens. Americans are maxed out on their credit cards, loans, mortgages, etc. No one can take anymore...we are reaching our maximum borrowing potential.
edit: another way to see why banks will end up owning everything is that when you take out a loan, you must put up collateral. The bank doesn't have to put up anything, only give you money which is actually based on someone else's deposits. So this is a disequilibrium, you give the bank real value, and they write something on their balance sheets.
While they may only be collecting interest as you say (which always increases in the overall system), when you default (inevitable deflation happens), the bank takes ownership of your property. Thats when they really own everything, the interest profit isn't the main focus. This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought. Yes, the bank holds the value. Then they liquidate it, extracting their money from the system. Once that money is extracted, they add it to their balance sheet to cover the debt, and it disappears. The money does not disappear. If the money from liquidation covers the loan the bank may net $0 but the money is still there sitting in someone's account debt free.
dude....I gave a quote from wikipedia that says money is destroyed when loans are repaid....I don't know what else I can say.
The money appeared from a bank's double-accounting trick, and when that money is repaid, it disappears in the same way.
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On October 06 2008 09:18 fight_or_flight wrote:Show nested quote +On October 06 2008 09:15 mahnini wrote:On October 06 2008 08:59 fight_or_flight wrote:On October 06 2008 08:51 mahnini wrote:On October 06 2008 08:35 fight_or_flight wrote:On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:On October 06 2008 07:47 mahnini wrote:
[quote]
This is simply untrue. We do not need to borrow more money to pay off interest. We can generate value through assets/services and sell them (just like the bank is doing). But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought. Yes, the bank holds the value. Then they liquidate it, extracting their money from the system. Once that money is extracted, they add it to their balance sheet to cover the debt, and it disappears. The money does not disappear. If the money from liquidation covers the loan the bank may net $0 but the money is still there sitting in someone's account debt free. dude....I gave a quote from wikipedia that says money is destroyed when loans are repaid....I don't know what else I can say. The money appeared from a bank's double-accounting trick, and when that money is repaid, it disappears in the same way.
The money generated from the security as a result of the loan disappears. The principle money used for the loan still exists.
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On October 06 2008 07:36 babypo0 wrote:
the latter part of this is accurate. the beginning part about religion is poorly researched.
but it's funny how anything christian is banned and closed and flamed while anything anti christian gets revived from the dead.
it can be anything religious, so long as it's not christian. that's how to get threads survived on TL. you'd think that a protestant nation would be more inclined to at least letting the basics get word out. for being the largest protestant nation in the world, it's funny how this bias resonates in the nation, even outside of TL.
TL is not a US site, so you are wrong.
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On October 06 2008 09:22 mahnini wrote:Show nested quote +On October 06 2008 09:18 fight_or_flight wrote:On October 06 2008 09:15 mahnini wrote:On October 06 2008 08:59 fight_or_flight wrote:On October 06 2008 08:51 mahnini wrote:On October 06 2008 08:35 fight_or_flight wrote:On October 06 2008 08:11 mahnini wrote:On October 06 2008 08:02 fight_or_flight wrote:On October 06 2008 07:54 c wrote:On October 06 2008 07:51 fight_or_flight wrote:
[quote]
But you have to pay off your debt in their money, greenbacks. They hold the monopoly on greenbacks. I understand that you pay off debt with money, I don't understand your point. You have to pay loans off in greenbacks. The only way greenbacks come about is when someone puts up collateral, and takes out a loan. So for the loans to be payed off, the banks require a constant source of real value, the assets you are talking about, to be put up as collateral. Individually, its very easy for you, mahnini, to pay off your loan. However, when you do that (see the wiki article), that money you've repaid goes out of existence, and the money supply shrinks. This makes it more difficult for someone else who has a loan to pay it back. They simply can't use their valuable assets and give them to the bank, their assets must be given a dollar value. Incorrect, the money you've repaid is still in the system but the value of the security that was generated when you took out the loan has disappeared. This comes back to the whole money = debt idea. If there is no debt, there is no money. You have a positive adding to a negative to give zero. From the wikipedia article: http://en.wikipedia.org/wiki/Money_creation"Similarly, money destruction, i.e., the reverse of money creation, can occur in two different ways, depending on how the money was created. The destruction of physically created money occurs when coins are scrapped to recover their precious metal content, or when the issuer redeems the securities. The destruction of money created through loans occurs as the loans are paid back." But if there isn't any money in the economy, all of a sudden people aren't willing to pay for your service. It is "worth" less. The bank will only give you a small amount for it.
A good example is mortgages. They are "stinky" and "bad". Nevermind the fact that they are american homes, real, american property. There isn't any money out there, and the banks will only use your valuable assets for a few cents on the dollar. Thats deflation... I'm talking about the economy as a whole, so long as people are generating desirable goods and services the money will always circulate as value is created and purchased, and the profits that the bank make are probably themselves put into an account which can be loaned. No, unless people continually take out loans and acquire debt, there can be no money. When the loans are paid back, through repayment of default, the money "vanishes into thin air". In the great depression, no one had any money. All the money disappeared. Do you think there wasn't plenty of value around? The roaring 20's meant there was plenty businesses, factories, cars, all kinds of stuff. How did everything disappear? http://en.wikipedia.org/wiki/Great_Depression#Debt This is incorrect, you seem to think money in and of itself holds value. While the amount of money in the system affects the perceived value of it, in the end money is just a medium of exchange. So when banks default on assets money does not disappear, banks take value for value and ends up eliminating the security. The money is still there, the person still spent the money and it is still in the system. This is what I meant by generating value through assets, the person is now presumably debt free and there is money in the system that is not based on debt. Money can always be put into circulation as assets or services are bought. Yes, the bank holds the value. Then they liquidate it, extracting their money from the system. Once that money is extracted, they add it to their balance sheet to cover the debt, and it disappears. The money does not disappear. If the money from liquidation covers the loan the bank may net $0 but the money is still there sitting in someone's account debt free. dude....I gave a quote from wikipedia that says money is destroyed when loans are repaid....I don't know what else I can say. The money appeared from a bank's double-accounting trick, and when that money is repaid, it disappears in the same way. The money generated from the security as a result of the loan disappears. The principle money used for the loan still exists.
There are two cases a loan is repaid:
1) someone pays it off
2) they default assets are liquidated
In case (1) the person may have thrown a whole ton of money out there into the system. But, to pay it off, they've retrieved every single dime that the put out there plus more. So there is no net money in the system, in fact there is a little less than if it never happened due to the interest.
In case (2), the bank sells the collateral, and every single dime that the guy spent out there in the system with his loan has presumably been retrieved from the system.
There is no net money into the system when a loan is made.
Where is the principle? Its not in the system. The bank doesn't have it, they simply have a zero balance again. It doesn't exist.
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As if the kind folks who brought us Zeitgeist couldn't pack all of their stupidity into the hour and a half they've already stolen from their viewers.
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mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs?
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On October 06 2008 09:49 yoinkity wrote:
mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs?
Most educated people don't understand this, not even most people that work in banks....so I can't hold it against him too much.
Here is one of the parts of that Money as Debt video from the OP that helps explain this.
http://www.youtube.com/watch?v=_yvRZoM-2r8
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I really think it's dumb to seriously question economic systems in place without actually studying economics sufficiently. I think more often than not it's actually Not as simple as that high budget youtube video tells you it is, that when you come up with a problem, a question of "how can our economic system function this way?" the answer isn't necessarily "that's just the thing, it can't!"
But i'm just gonna say for sake of pondering, that what seems to me to be a problem is that all the loans being given out would temporarilly increase the amount of money in circulation before they can be payed back and made to disappear again, and during that time there would be inflation. But it wouldn't really be temporary because more loans are probably taken out before other ones can be payed back, so the extra money added to circulation is basically sustained. The perhaps incrimentally increased money supply would cause inflation, which would cause people to have to take out greater loans for the same value, and then there would be more money added to circulation.
But i can't seem to figure out why inflation is a bad thing, since each dollar is worth less but there are more dollars to counterbalance this. I haven't really thought this through but i've been theorycrafting economics for a while already and i think i'm gonna stop now.
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On October 06 2008 09:49 yoinkity wrote:
mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs?
nope, not an economics major, but go ahead and argue my points, i'll be glad to debate with you or concede the point if i feel i'm wrong.
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Vatican City State491 Posts
I cannot watch the movie now, but I wonder how does manhini address the problem of inflation.
Banks/FED create inflation by creating more and more money.
I wonder if FED (as other central banks) sets an inflation target - while at the same time, is the source creating inflation.
I actually have no idea what is the level of inflation in the US at the moment - I've read that somewhere (unfortunately I dont remember the source : /) that if the inflation in the US now was counted using the method used in the 1980's, it would be around 14%, not 4%.
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On October 06 2008 10:10 mahnini wrote:Show nested quote +On October 06 2008 09:49 yoinkity wrote:
mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs? nope, not an economics major, but go ahead and argue my points, i'll be glad to debate with you or concede the point if i feel i'm wrong.
i rest my case. lol please don't say your a high school student. arguing with you will take an enormous amount of technical economic terms. there would be no point unless you are atleast an undergrad that have a good foundation in economics. this video was for the layman, but the core of the problem is of course much more complicated. it is beyond the realm of even many graduate students. this is an interesting video for anybody, regardless of age or level of education. but the degree to which you act like a smartass and bash everyone is quite repulsive.
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On October 06 2008 10:19 yoinkity wrote:Show nested quote +On October 06 2008 10:10 mahnini wrote:On October 06 2008 09:49 yoinkity wrote:
mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs? nope, not an economics major, but go ahead and argue my points, i'll be glad to debate with you or concede the point if i feel i'm wrong. i rest my case. lol please don't say your a high school student. arguing with you will take an enormous amount of technical economic terms. there would be no point unless you are atleast an undergrad that have a good foundation in economics. this video was for the layman, but the core of the problem is of course much more complicated. it is beyond the realm of even many graduate students. this is an interesting video for anybody, regardless of age or level of education. but the degree to which you act like a smartass and bash everyone is quite repulsive.
What the fuck.
What makes your baby-brand-new 38 post ass REMOTELY qualified to make a post like this when you haven't made a SINGLE substantial post in this entire thread? On what grounds do you claim that it is beyond the realm of graduate students, unless by graduate students you mean your utter lack of comprehension of anything that has been posted in this thread. Cease posting like a juvenile i-know-more-than-everybody-so-i'm-not-even-gonna-post-psuedo-intellectual or your scrotum will be forcibly peeled off of your testicles.
p.s. i like mahnini's style. he makes liberal anger fashionable. mahnini FIGHTING
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On October 06 2008 10:17 closed wrote:
I cannot watch the movie now, but I wonder how does manhini address the problem of inflation.
Banks/FED create inflation by creating more and more money.
I wonder if FED (as other central banks) sets an inflation target - while at the same time, is the source creating inflation.
I actually have no idea what is the level of inflation in the US at the moment - I've read that somewhere (unfortunately I dont remember the source : /) that if the inflation in the US now was counted using the method used in the 1980's, it would be around 14%, not 4%.
inflation is typically handled by raising interest rates of money so less money is loaned out. the fed can also contract the money supply by selling us bonds effectively taking money out of circulation.
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On October 06 2008 10:19 yoinkity wrote:Show nested quote +On October 06 2008 10:10 mahnini wrote:On October 06 2008 09:49 yoinkity wrote:
mahnini are you a econ major? even if you are an undergrad econ major this topic is quite confusing/controversial for you to act like such a smartass dickhead. you have the most idiotic examples. eating food and bugs? nope, not an economics major, but go ahead and argue my points, i'll be glad to debate with you or concede the point if i feel i'm wrong. i rest my case. lol please don't say your a high school student. arguing with you will take an enormous amount of technical economic terms. there would be no point unless you are atleast an undergrad that have a good foundation in economics. this video was for the layman, but the core of the problem is of course much more complicated. it is beyond the realm of even many graduate students. this is an interesting video for anybody, regardless of age or level of education. but the degree to which you act like a smartass and bash everyone is quite repulsive.
i've made some pretty decent points that hold more than enough merit, take for example my first post. i think it's the best i've made in this thread.
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As far as I'm concerned, Mahnini is arguing against the quote of:
"That is what our money system is. If there were no debts in our money system, there wouldn't be any money."
-Marriner S. Eccles, Chariman and Governor of the Federal Reserve Board
Which completely blows my mind. The people who perpetuate the bastardized system more or less say it how it is and someone argues against it.
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Thomas Jefferson said that "The greatest threat to our Liberty are the money lenders who pose a greater threat than any standing army". His fears have been realised in full. Given that the constitution clearly gives the populace the right to bear arms to defend their liberty from threats internal and external. These money lenders have taken America's Liberty and the constitution clearly states that it is the duty of all Americans to get their guns and fight for their freedom once more and defeat this vile system.
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By the way money is created out of thin air. For example in a single day a couple months ago the federal reserve created 350 billion dollars to 'generate liquidity', the Australian reserve bank created 3 billion dollars in a single morning a week ago. Reserve banks all around the world are creating money left right and center at the moment to deal with this problem. But printing money does not work it only makes the problems worse. The whole chunk of argument previous that i could bear to read can be summed up simply, mahini is basically an idiot. I don't mean to be offensive but your arguments are only correct in a world tragically different to our own, a perception that those behind this system actively try to proliferate. Although i will qualify that by conceding that some points are valid and I admit to not reading it all.
I am an economics major but that is pretty much irrelevant in this context in my opinion.
The Federal Reserve is a private company who runs for a profit. There are former members of the Reserve sitting in the Bush administration right now it would appear to me that they have intentionally generated massive budget defecits for their own profit. The government borrows 500billion dollars, the federal reserve creates it out of thin air. The federal reserve earns hundreds of billions of dollars of profit for their effort. Seems a pretty good deal.
The argument that the Federal Reserve is a private company is not controversial. The argument that it runs for a profit is highly controversial. If you look at the Federal Reserves own website you will find it says that the Federal Reserve does not run for a profit, most of its (absolutely frigging enormous) revenues are taken up in costs and what profit remains are handed over to the Government. Now i have not heard of the government earning hundreds of billions of dollars a year thanks to the Federal Reserve. I conclude that the reserve earns an obscene profit at the expense of the America tax payer and they funnel these profits through 'costs', and then into their Swiss bank accounts for example.
This is placing immense pressure upon the American economic system, and upon the capacity of the federal government to actually help that economic system. It now buckling under the strain.
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On October 06 2008 09:25 man wrote:Show nested quote +On October 06 2008 07:36 babypo0 wrote:
the latter part of this is accurate. the beginning part about religion is poorly researched.
but it's funny how anything christian is banned and closed and flamed while anything anti christian gets revived from the dead.
it can be anything religious, so long as it's not christian. that's how to get threads survived on TL. you'd think that a protestant nation would be more inclined to at least letting the basics get word out. for being the largest protestant nation in the world, it's funny how this bias resonates in the nation, even outside of TL. TL is not a US site, so you are wrong.
ohh really. well then i eat my words. what country is the server in?
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On October 06 2008 11:05 Alizee- wrote:
As far as I'm concerned, Mahnini is arguing against the quote of:
"That is what our money system is. If there were no debts in our money system, there wouldn't be any money."
-Marriner S. Eccles, Chariman and Governor of the Federal Reserve Board
Which completely blows my mind. The people who perpetuate the bastardized system more or less say it how it is and someone argues against it.
hes not against the truthfulness of that quote, but he's pointing out to the skeptics and naysayers that even the ones at the top controlling this big monster acknowledge mahnini's argument that this system is not the way to go. in fact, that statement is dead on and should shut up naysayers who deny that the FED creates all the money it wants, and is responsible for over 99% of the inflation in the last century.
so it's whatever you focus on. i agree with that statement at the same time i disagree with it - agree that that is how our system works, and disagree that that statement justifies the continuation of it.
but then i haven't read this entire thread, just the gist of it, so i could be wrong about mahnini. but if so, then ya.
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Ok, I'm already sick of this thread. Agree to disagree.
Some argue that since debt and the interest on the debt can only be paid in the same form of money, the total debt (principal plus interest) can never be paid in a debt-based monetary system unless more money is created through the same process. For example: if 100 credits are created and loaned into the economy at 10% per year, at the end of the year 110 credits will be needed to pay the loan and extinguish the debt. However, since the additional 10 credits does not yet exist, it too must be borrowed. To some, this implies that debt must grow exponentially in order for the monetary system to remain solvent.[27][28]
Others argue that there is in fact no mathematical necessity for the money supply in a debt-based system to grow, since the interest portion of loan payments is not taken out of circulation, but goes into the lender’s account, where it can be spent back into circulation and eventually be used to pay off some loan principal. The "exponential" growth of debt need not be a concern because if GDP growth is positive, GDP is also growing exponentially and the ratio of debt to GDP may improve.
End.
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On October 06 2008 12:27 mahnini wrote:Ok, I'm already sick of this thread. Agree to disagree. Show nested quote +Some argue that since debt and the interest on the debt can only be paid in the same form of money, the total debt (principal plus interest) can never be paid in a debt-based monetary system unless more money is created through the same process. For example: if 100 credits are created and loaned into the economy at 10% per year, at the end of the year 110 credits will be needed to pay the loan and extinguish the debt. However, since the additional 10 credits does not yet exist, it too must be borrowed. To some, this implies that debt must grow exponentially in order for the monetary system to remain solvent.[27][28]
Others argue that there is in fact no mathematical necessity for the money supply in a debt-based system to grow, since the interest portion of loan payments is not taken out of circulation, but goes into the lender’s account, where it can be spent back into circulation and eventually be used to pay off some loan principal. The "exponential" growth of debt need not be a concern because if GDP growth is positive, GDP is also growing exponentially and the ratio of debt to GDP may improve. End.
This is the crux of the problem. You have a monetary system which functions with exponential growth, and it relies on exponential growth of real-world resources to back it. These resources may be goods or services, but it's pretty logical to me that you can't have exponential growth of anything in a finite system ie. our planet earth. The system is doomed to collapse because of this. Whether the collapse happens now or in 1000 years, it will eventually happen.
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And in fact the only thing which keeps the system running is the time-lag between when loan A is made and when it is repaid. During this lag, more money is loaned from the bank ie. new debt is created, which is then circulated and used by the population to pay off existing debts.
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On October 06 2008 12:27 mahnini wrote:Ok, I'm already sick of this thread. Agree to disagree. Show nested quote +Some argue that since debt and the interest on the debt can only be paid in the same form of money, the total debt (principal plus interest) can never be paid in a debt-based monetary system unless more money is created through the same process. For example: if 100 credits are created and loaned into the economy at 10% per year, at the end of the year 110 credits will be needed to pay the loan and extinguish the debt. However, since the additional 10 credits does not yet exist, it too must be borrowed. To some, this implies that debt must grow exponentially in order for the monetary system to remain solvent.[27][28]
Others argue that there is in fact no mathematical necessity for the money supply in a debt-based system to grow, since the interest portion of loan payments is not taken out of circulation, but goes into the lender’s account, where it can be spent back into circulation and eventually be used to pay off some loan principal. The "exponential" growth of debt need not be a concern because if GDP growth is positive, GDP is also growing exponentially and the ratio of debt to GDP may improve. End.
So I guess their argument is that if the GDP grows at the same rate as the money supply, there will always be enough new collateral to put up to generate new loans.
I don't think I like this argument very much...because it seems like mixing up the cause and effect. GDP is at least somewhat dependent on easy credit. When people are maxed out on debt, they are unable to borrow anymore, and deflation happens.
For example
http://www.housingbubblebust.com/GDP/Depression.html
(edit: notice the time lag between the initial crash and when the GDP dropped....shows that GDP may be more of an effect than a cause)
Spending the interest back into the economy still causes it to be deposited into banks, so they can loan out even more....it doesn't matter if the bank immediately loans it out, or if they buy a new vault and the company that sells it to them deposits it somewhere, so I don't understand what their argument is.
edit: btw, it still requires an ever increasing GDP just not to collapse, which itself is questionable
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i thought banks were a good thing. efficient credit markets allows for people to borrow money so that they can build factories and buy shit and it would be good!!! on the downside, if everyone who deposited money made a withdraw, it would be impossible for that to happen. you need to calculate the requirement so that the probability that the bank will be able to satisfy all the withdraws is close enough to zero that it doesn't matter.
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Well I think we've hashed through all the details of that Money as Debt video, so you can watch that and most of the wtf questions are answered in the thread.
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I like this discussion thread system. Arguments hashed over, left at four pages long not too long to read. Of course somebody might think they have the infallible argument concocted that demands to be shown to us all and start a new thread. But This system i like
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On October 06 2008 12:11 Choros wrote:
By the way money is created out of thin air. For example in a single day a couple months ago the federal reserve created 350 billion dollars to 'generate liquidity', the Australian reserve bank created 3 billion dollars in a single morning a week ago. Reserve banks all around the world are creating money left right and center at the moment to deal with this problem. But printing money does not work it only makes the problems worse. The whole chunk of argument previous that i could bear to read can be summed up simply, mahini is basically an idiot. I don't mean to be offensive but your arguments are only correct in a world tragically different to our own, a perception that those behind this system actively try to proliferate. Although i will qualify that by conceding that some points are valid and I admit to not reading it all.
I am an economics major but that is pretty much irrelevant in this context in my opinion.
The Federal Reserve is a private company who runs for a profit. There are former members of the Reserve sitting in the Bush administration right now it would appear to me that they have intentionally generated massive budget defecits for their own profit. The government borrows 500billion dollars, the federal reserve creates it out of thin air. The federal reserve earns hundreds of billions of dollars of profit for their effort. Seems a pretty good deal.
The argument that the Federal Reserve is a private company is not controversial. The argument that it runs for a profit is highly controversial. If you look at the Federal Reserves own website you will find it says that the Federal Reserve does not run for a profit, most of its (absolutely frigging enormous) revenues are taken up in costs and what profit remains are handed over to the Government. Now i have not heard of the government earning hundreds of billions of dollars a year thanks to the Federal Reserve. I conclude that the reserve earns an obscene profit at the expense of the America tax payer and they funnel these profits through 'costs', and then into their Swiss bank accounts for example.
This is placing immense pressure upon the American economic system, and upon the capacity of the federal government to actually help that economic system. It now buckling under the strain.
This is the fucking stupidest post in this entire thread. It fucking hurt to read it. The sheer fucking factual inaccuracy and dishonest idiocy made my ears ring and my anus bleed. In fact, when I read it aloud to my dog, he dropped dead of a brain aneurysm. It was so full of shit my large intestine couldn't compete. I couldn't post for a while because the internets got clogged, the tubes burst, and now my monitor is bleeding shit. There's so much shit here even Mike Rowe wouldn't touch it. They had McCain take a look and the sheer fucking shittiness of it caused him to have a stroke and die. Palin then commented, "EVEN TRIG'S DIAPER DOESN'T HAVE THAT MUCH SHIT."
SHITTY. YOUR POST IS SHITTY.
First, I don't claim to have the economics knowledge to attempt to debunk the theory here. But I do have a fucking problem with SHIT being posted on my TL, all over my intertubes
1.) The federal reserve does not print money. yes you can argue that it causes net inflation. but the next person to arbitrarily claim that the fed prints money or makes money appear through a secret incantation known only to the federal reserve chairman and that is passed down through an ancient rite of dance and ritual will a.) be humiliated at the revelation of their UTTER FUCKING IGNORANCE of how the fed works b.) have their testicles forcibly stapled over their hands to force them to think harder before they post. Printing of currency is not even under its jurisdiction. That's managed by the treasury. The federal reserve lends money by drawing from its own funds which are unrelated with the rest of government spending. This revenue is from government securities, its lending operations, and other esoteric shit.
2.) Mahnini is an idiot because he disagrees with you? What the fuck as far as having the facts wrong and not thoroughly understanding what they're talking about fightorflight is just as much of an idiot because as far as who is doing a better job of argument here, mahnini has more substance and is way more responsive, and has better warrants to his arguments. As opposed to absolute nonsense, unwarranted, castle in the sky claims like:
i have not heard of the government earning hundreds of billions of dollars a year thanks to the Federal Reserve. I conclude that the reserve earns an obscene profit at the expense of the America tax payer and they funnel these profits through 'costs', and then into their Swiss bank accounts for example.
WHAT. Every federal reserve branch pays 100% in income tax. Did you just run out of crazy ideas and decide to start talking about swiss bank accounts? Did your mental dialogue go something like: "Well if they buy the bullshit I posted so far they'll buy this shit about swiss bank accounts!" Did you proceed to stroke yourself to orgasm at the realization of your boundless genius? Did you cum? WAS IT PLEASANT, YOUR NARCISSISTIC SELF-PLEASURE?
I don't think I like this argument very much...because it seems like mixing up the cause and effect. GDP is at least somewhat dependent on easy credit. When people are maxed out on debt, they are unable to borrow anymore, and deflation happens.
is a good example of the kind of argument this entire shitty thread has been plagued with, admittedly from both sides.
edit:
ohhh the comment about the dog above was by no means a jab at pubbanana, i didn't even realize when i wrote it o_O
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hi just here to redeem myself. my first few responses were admittdely overboard with craziness but once i realized that you might have a substantial argument, in no way or form were my responses absurd or stupid from that point on. anyway, i'll leave this thread to it's circular reason.
wesside bitches
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On October 06 2008 15:31 ahrara_ wrote:Show nested quote +I don't think I like this argument very much...because it seems like mixing up the cause and effect. GDP is at least somewhat dependent on easy credit. When people are maxed out on debt, they are unable to borrow anymore, and deflation happens. is a good example of the kind of argument this entire shitty thread has been plagued with, admittedly from both sides.
I said I didn't like it, not that I necessarily disagreed with it. But you're right, thats why I didn't go into economics. The whole field is full of similar shitty arguments.
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In all fairness, how many of you kind folks have taken even an intro macro class in college?
If you have, congrats, but that in no way puts you into the minority who actually has a clue of what's going on right now.
Absurd conspiracy theories are appealing because of their simplicity. That doesn't make them reasonable, factual or truthful.
Please, for anyone reading this thread, don't waste your time letting a pack of retards shit the contents of their brains into yours. PM me, and I'll be more than happy to give you the breakdown of the world financial system.
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On October 06 2008 16:53 tttt wrote:
In all fairness, how many of you kind folks have taken even an intro macro class in college?
If you have, congrats, but that in no way puts you into the minority who actually has a clue of what's going on right now.
Absurd conspiracy theories are appealing because of their simplicity. That doesn't make them reasonable, factual or truthful.
Please, for anyone reading this thread, don't waste your time letting a pack of retards shit the contents of their brains into yours. PM me, and I'll be more than happy to give you the breakdown of the world financial system.
It would appear that much of the time education = close mindedness. Understanding the mechanics of this system and understanding the insufficient paradigms upon which contemporary economic management are build can as it is in my case leave one disillusioned about its fundamental incompetence. But often it seems to lead only to indoctrination and the utter rejection of anything which would disagree with what they already believe even though the truth is right before their eyes.
You go back to ancient Rome and you say conspiracy to someone and they will say 'shut the fuck up you wanna get killed' they understood the reality that conspiracies are very real particularly when they involve money and power. Yet today you say 'conspiracy' and people assume it will be some amusing falsehood.
You want to reject conspiracy theories about reptilian aliens from the fourth dimension, fine go ahead. But reject conspiracy theories which revolve around power and money at your peril. What better way to cover up their mischievous ways then to proliferate this concept that conspiracy theories are false by definition its self. You might as well write it in the dictionary Conspiracy theory = something that is wrong. Clearly this is not the case. It would appear to be a human constant that there are some people who will not accept anything which exists beyond that which they already have accepted to be the truth. History has shown such people are wrong more often that they are right but there is nothing which will change their mind and the more evidence you provide the more violent their attempts to protect the falsehood.
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ya guys
fuck education
that shit is so old school
get it
old school
LOLOLOLOLOLOLOLOLOLOLOLOL
History has shown such people are wrong more often that they are right but there is nothing which will change their mind and the more evidence you provide the more violent their attempts to protect the falsehood.
Please please please please please please please continue making such baseless claims. They make you so much more credible than you already are!!!111
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On October 06 2008 16:53 tttt wrote:
Absurd conspiracy theories are appealing because of their simplicity. That doesn't make them reasonable, factual or truthful.
Ah, it is absurd that banks create money then? Where is this conspiracy theory you speak of?
Please, for anyone reading this thread, don't waste your time letting a pack of retards shit the contents of their brains into yours. PM me, and I'll be more than happy to give you the breakdown of the world financial system.
Your right, we should accept what the analysts on FOX tell us and not think for ourselves. Or just accept what your textbook tells you.
I took an intro economics class in college and there was a question from the textbook: "Is there any danger for the Federal Government borrowing money?" Answer: "No, because it can always borrow more money to cover the interest." Its just ridiculous.
This thread has been discussing the most basic, mundane things, which your macroeconomics classes probably don't even cover because they are implicitly assumed. If there is some specific thing you disagree with, feel free to point it out.
This seams similar to the history of science, which I can speak with more authority because I have an EE/physics degree. What is taught in the classroom is always incorrect, because of our incomplete understanding of science. However, it generally happens that the strict education and view of most scientists creates dogma which ultimately hinders scientific progress. Time after time, in fact, almost every great discovery is rejected by the discovers peers. From Galileo to quantum mechanics, more times than not a new idea comes to the forefront only when its opponents die off. This is a subject I've posted on many many times.
edit: + Show Spoiler [scientists who faced this problem for…] +"...the scientist makes use of a whole arsenal of concepts
which he imbibed practically with his mother's milk; and
seldom if ever is he aware of the eternally problematic
character of his concepts. He uses this conceptual
material, or, speaking more exactly, these conceptual
tools of thought, as something obviously, immutably
given; something having an objective value of truth which
is hardly even, and in any case not seriously, to be
doubted. ...in the interests of science it is necessary over
and over again to engage in the critique of these
fundamental concepts, in order that we may not
unconsciously be ruled by them."
-Albert Einstein
"…science is not the danger; scientists encouraged to do
bad science to survive are.” … "…changing the way
modern science is funded is an enormous undertaking, but
it is a necessary one if we want to protect our future. Call
it managed risk."
-Smith
"Anybody who has studied the history of science or
worked as a scientist knows that whenever something
novel is discovered or proposed, there is a polarization of
scientists, with hostility and bitterness that may last for
generations. What wins arguments is scientific fact, and
that may change as the years go by. A good example of
this is the geological theory of continental drift, as
proposed by Wegener in 1912. When I studied geology
around 1950, continental drift was acknowledged in my
undergraduate textbook as a crank theory. The first
serious confirmation was in 1956, and it was finally
established as the dominant theory in the early 1970s.
Until that time, anybody who admitted that he or she
believed in continental drift was the subject of derision
and scorn. Sorry, folks, science is not and has never been
the 'idealized portrait painted in textbooks'."
-Allan Blair
"…I suggest that most revolutions in science have taken
place outside the lofty arena of the refereed journals, and
with good reason. The philosophy by which these journals
govern themselves virtually precludes publication of ideas
that challenge an existing consensus."
-William K. George
"An important scientific innovation rarely makes its way
by gradually winning over and converting its opponents:
it rarely happens that Saul becomes Paul. What does
happen is that its opponents gradually die out, and that
the growing generation is familiarized with the ideas from
the beginning."
-Max Planck
"We used to be able to say things once; if the message
was reasonable, it had a good chance of becoming a
permanent part of the structure of the field. Today, a
single publication is lost; if we say it only once, it will be
presumed that we have changed our mind, and we
therefore must publish repeatedly. This further fuels the
large publication volume that requires us to repeat."
-Rolf Landauer
"When a distinguished but elderly scientist states that
something is possible he is almost certainly right. When
he states that something is impossible he is very probably
wrong."
[Clarke's First Law]
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On October 06 2008 17:16 ahrara_ wrote:
ya guys
fuck education
that shit is so old school
get it
old school
LOLOLOLOLOLOLOLOLOLOLOLOL
Indeed.
On a more serious note there would appear to be a serious but subtle difference between education and indoctrination. How would you describe the 'education' being delivered in the Islamic schools springing up like wildfire in Pakistan's tribal areas which border Afghanistan? Education is fundamentally important, and indeed if the quality of education in the United States was better (America compares roughly to Slovenia on international scales) then their economic and political situation would probably be far better.
It was realised around the turn of last century (though possibly far earlier) that education is a great method of indoctrination, the Japanese taught their students that it was honorable and necessary to die for the emperor. They were very effective at proliferating this belief.
Education is the key to increasing ones understanding and personal prosperity, but just taking in what is told to you unquestioningly will achieve only the opposite.
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History has shown such people are wrong more often that they are right but there is nothing which will change their mind and the more evidence you provide the more violent their attempts to protect the falsehood.
Please please please please please please please continue making such baseless claims. They make you so much more credible than you already are!!!111[/QUOTE]
How about burning scientists at the stake for claiming the world is round? There are so many examples of what I suggested here I took it as common knowledge and did not bother to provide qualification.
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yea....a point I always drill to people. I guess economics is technically a science.
+ Show Spoiler [scientists who faced this problem] +"...the scientist makes use of a whole arsenal of concepts
which he imbibed practically with his mother's milk; and
seldom if ever is he aware of the eternally problematic
character of his concepts. He uses this conceptual
material, or, speaking more exactly, these conceptual
tools of thought, as something obviously, immutably
given; something having an objective value of truth which
is hardly even, and in any case not seriously, to be
doubted. ...in the interests of science it is necessary over
and over again to engage in the critique of these
fundamental concepts, in order that we may not
unconsciously be ruled by them."
-Albert Einstein
"…science is not the danger; scientists encouraged to do
bad science to survive are.” … "…changing the way
modern science is funded is an enormous undertaking, but
it is a necessary one if we want to protect our future. Call
it managed risk."
-Smith
"Anybody who has studied the history of science or
worked as a scientist knows that whenever something
novel is discovered or proposed, there is a polarization of
scientists, with hostility and bitterness that may last for
generations. What wins arguments is scientific fact, and
that may change as the years go by. A good example of
this is the geological theory of continental drift, as
proposed by Wegener in 1912. When I studied geology
around 1950, continental drift was acknowledged in my
undergraduate textbook as a crank theory. The first
serious confirmation was in 1956, and it was finally
established as the dominant theory in the early 1970s.
Until that time, anybody who admitted that he or she
believed in continental drift was the subject of derision
and scorn. Sorry, folks, science is not and has never been
the 'idealized portrait painted in textbooks'."
-Allan Blair
"…I suggest that most revolutions in science have taken
place outside the lofty arena of the refereed journals, and
with good reason. The philosophy by which these journals
govern themselves virtually precludes publication of ideas
that challenge an existing consensus."
-William K. George
"An important scientific innovation rarely makes its way
by gradually winning over and converting its opponents:
it rarely happens that Saul becomes Paul. What does
happen is that its opponents gradually die out, and that
the growing generation is familiarized with the ideas from
the beginning."
-Max Planck
"We used to be able to say things once; if the message
was reasonable, it had a good chance of becoming a
permanent part of the structure of the field. Today, a
single publication is lost; if we say it only once, it will be
presumed that we have changed our mind, and we
therefore must publish repeatedly. This further fuels the
large publication volume that requires us to repeat."
-Rolf Landauer
"When a distinguished but elderly scientist states that
something is possible he is almost certainly right. When
he states that something is impossible he is very probably
wrong."
[Clarke's First Law]
|
you are telling us to not just swallow what's being taught by technocrats who study teh economy for a living and want us to replace that education with a 2 hour movie that also argues about 9/11 and some jesus conspiratorial shit. hm. it's one thing to argue very well and reasonably (jgad did a great job in the other thread), it's another to come in here ranting baselessly about how the fed generates money out of thin air. when you educate yourself, i'll educate myself thanks.
please do not equate galileo and copernicus to the makers of zeitgeist and ron paul.
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On October 06 2008 17:30 ahrara_ wrote:
please do not equate galileo and copernicus to the makers of zeitgeist and ron paul.
I'm not doing that.....lol. I'm just saying always question the fundamentals.
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well, ya. no hostility intended. i'm really only annoyed with Choros and his habit of making wild baseless claims.
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The whole point i make is that one should not 'swallow' the movie, nor should one 'swallow' the sayings of technocrats. It is interesting that you use this term as it is a pet hate of mine, they say I am a technocrat, I understand economics, If you do this then this will happen. This correct under certain economic circumstances but simply wrong under others. This obsession of theirs in their own omnipotence, their overwhelming belief that they have solved economics is a terrible thing. We should never assume we have solved economics. The fundamental reason that economic policy failed in the 1970's was that they assumed they had solved economics. And now we repeat their great error.
What one must do in terms of economics is to sit there and look at what problems you face, then create policies in response. Often times we have seen those problems before and can use old solutions i.e Keynesian economics is appropriate today. But often problems are new and require new responses in order to deal with them. I advocate open mindedness above all and I have not argued against those who say this film is wrong because they say it is wrong, but because I believe their claims are based upon close mindedness above all else.
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wow... what a terrible movie... : /
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On October 06 2008 17:27 fight_or_flight wrote:
I guess economics is technically a science.
Economics is 25% bs, 25% ideology and the 50% left are math for newbs.
+ Show Spoiler + i guess i'm trolling a bit.
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The claim that bothers me is "the fed creates money by waving the magical wand of inflation!!!11"
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Imo money is not the problem in itself, its great, if we lived in a utopia we would probably have tickets, or chips, or something to trade for food.
You cant really expect a world with evil, greed, selfiness to even begin to accept a message that portraits money as the problem, because the problem is what we, as flawed human beings, do with it.
Money is power, you can use it for good, and you can use it for evil. (in a really broad sense)
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On October 06 2008 19:21 D10 wrote:
Imo money is not the problem in itself, its great, if we lived in a utopia we would probably have tickets, or chips, or something to trade for food.
You cant really expect a world with evil, greed, selfiness to even begin to accept a message that portraits money as the problem, because the problem is what we, as flawed human beings, do with it.
Money is power, you can use it for good, and you can use it for evil. (in a really broad sense)
Yeah I agree. I have some serious issues with their Utopian society, money can be used for good or bad, I believe good can be done through competent economic policies.
I agree with them with the idea that huge supply side increase will be a tremendous benefit to people this is effectively what i argue for.
The biggest problem I have is that they think you can just abolish the police and laws and everyone will be nice. Utter bogus. Some people are born psychopaths, some people are probably born psychopathic killers. We need protecting.
These people in general are really quite naive.
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I was wondering why in first part goldsmith loaned money (loan agreement) something he didn't own himself (isn't this a big fail?). Sure he kinda owned house but what happens if house burns down and now everybody wants gold back?
But yeh I can't get let say loan for new house because I need something to bank to get hold of it. Easiest way is to get someone co-sign (who then pays back if I fail to pay back) the loan but who the fuck does that, I wont ever (even to my maybe future childrens) do that.
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everything will be ok, cause there is an invisible man in the sky, watching us..
+ Show Spoiler +
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Uhm, i'm a noob at economic, but this is how I understand, sorry for lack of technical terms:
Let's say, when we produce goods or perform service, we create "value".
Now the purpose of money is to carry "value". Say you worked 1 month in McDonald, you created some value and money is used to carry those value in order to trade-in for other value u need like food.
Money cannot create value. When money is created from thin air, these money must worth nothing. However, in fact, the created money steals value from the current money in the system. Hence the inflation.
Money demand: when we create more value and the needs for value trading increase. As money is used as a value carrier, if the current volume of money in the system is not enough, it is a money shortage. Value trading cannot establish due to the lack of the carrier, therefore money must be created for this purpose.
So who decides when to create money? What about destroying money when the total value in the system is decreasing?
Given how important the decision is. The process of making decision to create/destroy money must be made by expert economists supported by reliable statistics?
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Someone needs to explain to me this whole money out of thin air concept.
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Just finish watching
The whole movie is what communism is all about. It's time to move to communism people. Or should i say, modern communism because the old one cannot be applied anymore.
In Vietnam, we used to use ticket or some sort instead of using money. In fact, we tried to get rid of money but it failed for some reason. But after the war, our economy was fucked up anyway, anything would fail.
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On October 07 2008 04:10 mahnini wrote:
Someone needs to explain to me this whole money out of thin air concept.
You (the big money lenders) dont have money,
You lend it anyway because all you need to do is print/emit credit.
Tons of things involved in the process but i guess its pretty much it.
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On October 07 2008 04:27 D10 wrote:Show nested quote +On October 07 2008 04:10 mahnini wrote:
Someone needs to explain to me this whole money out of thin air concept. You (the big money lenders) dont have money, You lend it anyway because all you need to do is print/emit credit. Tons of things involved in the process but i guess its pretty much it.
If you don't know what you're talking about, stop posting like you do. seriously. it's not a hard concept to grasp. Because you watched a movie doesn't make you a goddamn expert.
On October 06 2008 15:31 ahrara_ wrote:
1.) The federal reserve does not print money. yes you can argue that it causes net inflation. but the next person to arbitrarily claim that the fed prints money or makes money appear through a secret incantation known only to the federal reserve chairman and that is passed down through an ancient rite of dance and ritual will a.) be humiliated at the revelation of their UTTER FUCKING IGNORANCE of how the fed works b.) have their testicles forcibly stapled over their hands to force them to think harder before they post. Printing of currency is not even under its jurisdiction. That's managed by the treasury. The federal reserve lends money by drawing from its own funds which are unrelated with the rest of government spending. This revenue is from government securities, its lending operations, and other esoteric shit.
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On October 07 2008 04:54 ahrara_ wrote:Show nested quote +On October 06 2008 15:31 ahrara_ wrote:
1.) The federal reserve does not print money. yes you can argue that it causes net inflation. but the next person to arbitrarily claim that the fed prints money or makes money appear through a secret incantation known only to the federal reserve chairman and that is passed down through an ancient rite of dance and ritual will a.) be humiliated at the revelation of their UTTER FUCKING IGNORANCE of how the fed works b.) have their testicles forcibly stapled over their hands to force them to think harder before they post. Printing of currency is not even under its jurisdiction. That's managed by the treasury. The federal reserve lends money by drawing from its own funds which are unrelated with the rest of government spending. This revenue is from government securities, its lending operations, and other esoteric shit.
If you don't know what you're talking about, stop posting like you do. seriously. it's not a hard concept to grasp. Because you watched a movie doesn't make you a goddamn expert.
Dude, did you just quote and criticize yourself?
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Rolf. I think he wanted to quote Choros  .
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I am very pleased to see threads like this every one in a while. It means that there are still some people who put into question all the mainstream shit we swallow everyday, be it true or not.
I watched Money as debt several times and I found it very interesting. Of course I have no degree in economics and I won't believe any conspiracy blindly. Shocking as it is, it still seems to hold some truth nevertheless.
This makes you think out of the box for a while which is something we all desperately need nowadays.
We're in deep shit (economic crisis) and stuff like this shouldn't be ignored like most people like to do by putting a bandage in their eyes thinking we live in a happy world and our papa bankers and governors gonna solve this.
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On October 07 2008 06:40 ahrara_ wrote:
i was referring to D10
i was just guessing.
nowhere in my post i stated it was the absolute truth.
thanks for pointing my mistakes in the most jerkish way possible.
edit: and you make way more assumptions about my post than i did about the whole thing.
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That Money as Debt movie is an absolute mindfuck. This all true? holy shit
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Isn't this public knowledge? Everyone and I mean everyone knows banks creates money. It isn't called for nothing Fractional Reserve System, just some fancy words we create money for a fractional of the money we(as in banks) do have.
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On October 07 2008 21:42 D10 wrote:i was just guessing. nowhere in my post i stated it was the absolute truth. thanks for pointing my mistakes in the most jerkish way possible. edit: and you make way more assumptions about my post than i did about the whole thing.
you don't see why i would have a problem with people posting and repeating NON-FACTS?
Battlecruisers have a siege mode and they can turn into robots!
Also everybody knows TvP is so imbaaa!
That's how ridiculous it sounds when people say "The fed prints money".
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You are so right, the fed doesn't print money, the mint does.
The fed just types it in, goes faster that way.
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On October 08 2008 06:59 PliX wrote:You are so right, the fed doesn't print money, the mint does. The fed just types it in, goes faster that way.
AND THE MINT DEDUCTS THE PRINTED VALUE FROM THE TREASURY'S ACCOUNT.
PLEASE READ A BOOK B4 POSTING TY
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i hope people find this little post on this 6th page in a long and boring thread, but i think the video is very bad.
comparative advantage: the video said that underdeveloped countries were being exploited by richer countries through trade and multinational corporations. this is untrue. International trade crushing domestic industries means that they had a misallocation of resources in the first place. Every country has a comparative advantage in something (that is a must) and they should be producing what they're good at rather than things they're bad at producing. They could then trade for the other products and both parties will benefit. Also, multinational companies "exploiting" foreigners via sweatshops is not a bad thing. Any developmental economist will tell you that is good as long as working conditions are not dangerous. The workers will start having disposable incomes, factories will be built, etc etc. The very fact that they are working there means that they are doing it willingly.
loans to developing nations: loans are not made to countries so that the the wealthy countries can dick over the poorer ones. The IMF and World Bank serve as a lender of last resort when the government can't get money from anywhere else. if a country's government is broke and needs to borrow money, the IMF is the organization that needs to approve the loan before it goes to a bank like citibank. They stipulate a bunch of conditions to make sure that they can get the money back! There are much deeper reasons why some developing nations fail such as: inefficient banking system, trade barriers, lack of infrastructure, etc.
resource based economy: even if people still have the incentive to work, when they have everything already provided for them (i know i won't be working. collapse of soviet union?), there is a huge problem with the allocation of resources. Resources are scarce and it's going to be really tough to figure out who gets what, or does everyone get the same?
money: money has no intrinsic value because it's just fancy paper. but, we give it value by exchanging it for goods and services. this allows for efficient markets so that we can buy/sell stuff easily. it doesn't really matter how much money is in the money supply because if one day we decide to just double the money supply, prices will just double to compensate.
Is it a problem that it's created through lending? This is kind of interesting and i'm kind of lazy and don't want to think about it. My first instinct is no because what would happen if we fixed the money supply at the current amount? money would continue circulating as usual. People would pay back their debts. The banks would take that +the interest as profits and spend it hiring new people and other expenditures. They would pay back the money it borrowed from the government, which in turn could use it on whatever the government spends money on (or it could show up as a budget surplus). The money would just keep circulating and the principle + debt isn't really a problem because the total money supply is the principle + debt, not just the principle.
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i mean principle + interest =\
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Why do we even need money?
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On October 08 2008 15:59 geometryb wrote:
comparative advantage: the video said that underdeveloped countries were being exploited by richer countries through trade and multinational corporations. this is untrue. International trade crushing domestic industries means that they had a misallocation of resources in the first place. Every country has a comparative advantage in something (that is a must) and they should be producing what they're good at rather than things they're bad at producing. They could then trade for the other products and both parties will benefit. Also, multinational companies "exploiting" foreigners via sweatshops is not a bad thing. Any developmental economist will tell you that is good as long as working conditions are not dangerous. The workers will start having disposable incomes, factories will be built, etc etc. The very fact that they are working there means that they are doing it willingly.
loans to developing nations: loans are not made to countries so that the the wealthy countries can dick over the poorer ones. The IMF and World Bank serve as a lender of last resort when the government can't get money from anywhere else. if a country's government is broke and needs to borrow money, the IMF is the organization that needs to approve the loan before it goes to a bank like citibank. They stipulate a bunch of conditions to make sure that they can get the money back! There are much deeper reasons why some developing nations fail such as: inefficient banking system, trade barriers, lack of infrastructure, etc.
Comparative advantage doesn't mean that the situation is fair ( the word fair don't exist in economics ). It means the trade will be "efficient" for the two countries. Moreover " International trade crushing domestic industries" maybe means that those domestic industries weren't competitive but this will lead to a loss of technology knowledge and all the gains will benefit to the foreign firm.
So in your second part when you say that trade barriers are bad you are wrong. Sometimes they are good if you want to protect a "young" industry. If you study a bit the development of Asian and African countries you will understand.
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i dont know what you mean by fair or not. both participants in trade are better off and will maximize their happiness under trade. of course, there are "losers" in trade (scarce factor gets screwed), but the overall increase in surplus is much >>>> than what the losers lose.
import substitution is always going to make the country worse off. there are some pros for it, but it is pretty well understood that protecting infant industries isn't a valid reason for trade barriers because protected industries are always going to be an inefficient misallocation of resources. There's also no real reason to think that a country will one day gain the comparative advantage in one product so the government should prop that industry up until it does. You might be confused that just because an country has a comparative advantage/disadvantage they are producing all of one thing and none of the other. There will always be some imported and the gap between amount imported and amount demanded will be domestically produced.
some of the reasons for it are: developing countries use it for tax revenue because they dont have any income to tax (which might be what you're talking about in africa and asia); helps solve chronic balance of payment problems, industrial self reliance/control over it's own economy. but those reasons aren't that great.
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I will make a long post tonight with real examples and not some sort of "by the book" micro principles.
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i think you should take my post in the context of the video, which said that trade was destroying poor countries and that multinational companies were exploiting them.
i dont really want you to go on some random tangent about how trade barriers are helping developing nations.
edit just to get the last word: if you compare countries that globalized with countries that didn't, i think it becomes pretty clear that countries that reduced trade barriers are doing better.
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On October 08 2008 15:59 geometryb wrote:
Is it a problem that it's created through lending? This is kind of interesting and i'm kind of lazy and don't want to think about it. My first instinct is no because what would happen if we fixed the money supply at the current amount? money would continue circulating as usual. People would pay back their debts. The banks would take that +the interest as profits and spend it hiring new people and other expenditures. They would pay back the money it borrowed from the government, which in turn could use it on whatever the government spends money on (or it could show up as a budget surplus). The money would just keep circulating and the principle + debt isn't really a problem because the total money supply is the principle + debt, not just the principle.
The problem you fail to see is that in order to pay the deficit caused by the interest, new loans must be taken provided that all money was already created through loans. On the long run, that brings us to an exponential growth of debt + need of more goods/services for the loans to be made. That would be possible in a world with infinite resources, but that's not our case, right?
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maybe you misread what i said. but, isn't the interest on the debt part of the newly created money?
so the total money created = principal + interest.
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On October 08 2008 20:30 geometryb wrote:
edit just to get the last word: if you compare countries that globalized with countries that didn't, i think it becomes pretty clear that countries that reduced trade barriers are doing better.
oh noes communism failed !
That isn't what i said. Japan and China ( for example ) used ( and still use ) trade barriers during their development and they are doing good atm.
Many countries in Africa didnt use trade barriers and they are in a bad situation. No industries, no technologies and they have to buy all their manufactured goods from China or Europe. According to Ricardo they would be in a great situation because they sell raw materials ( their specialisation ) for other goods.
Haha.
Trade barriers are investments. You bet that your own industries will be able to produce better goods than other countries. You just need some time and help of the government ( tax cuts, trade barriers ... ). Then you can get exportable goods, patents and this will lead to higher gains than sweatshops.
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when i picture this for simplicity i see a 3 person world.
i see a bank that creates $1000 and loans it to joe and there is $100 interest over the lifetime of the loan. There is also Sally who is holding $1500. That means the total money supply is $2600.
Joe sells some apples to sally for $1300 dollars so he now has $2300.
He pays back the bank. The bank now has $1100, Joe has $1300, sally has $200.
Bank hires sally. gives her $100 etc etc etc
money is always constant at 2600
edit: unless joe can't pay back his loan. in which case, it would be constant at 2500 or however much he can pay back. i.e. he sells 0 apples and pays back the bank $1000
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but the important part is: debts are paybackable
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But what if the money Sally had was also debt money, so she in fact owed 2600 + 260 to the bank. She wouldn't be able to pay the loan after she bought those apples unless she took another loan wouldn't she?
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oh hmmm. i see now. i was wrong.
it is impossible for everyone to pay back the interest. i guess sally has to declare bankruptcy, it wouldn't make sense for her to get a loan to pay back a loan she couldn't pay back. but does it start working out once enough people go bankrupt?
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Dominican Republic106 Posts
On October 08 2008 15:59 geometryb wrote:
comparative advantage: the video said that underdeveloped countries were being exploited by richer countries through trade and multinational corporations. this is untrue. International trade crushing domestic industries means that they had a misallocation of resources in the first place. Every country has a comparative advantage in something (that is a must) and they should be producing what they're good at rather than things they're bad at producing. They could then trade for the other products and both parties will benefit. Also, multinational companies "exploiting" foreigners via sweatshops is not a bad thing. Any developmental economist will tell you that is good as long as working conditions are not dangerous. The workers will start having disposable incomes, factories will be built, etc etc. The very fact that they are working there means that they are doing it willingly.
Ok, I wasnt going to post because im not that qualified but I im going to tell you in this regard, you are completely wrong. I live in a country that has been exploited by this system since before our proclamation of independence, first from English banks, and now from the FMI(Fondo Monetario Internacional, [which I think is the IMF in english]), remember this is all the news I've been reading locally since I was a child. Loan after loan has put us into a debt that we will obviously never pay off,
its the sole reason why our gallon of gas is equivalent to 6 US dollars, most people make shitty wages and getting by is a hassle even for "middle class" here. Most of teh sweatshops are flocking out at the moment, the goverment is even subsidizing(sp?) some of its cost to retain a few, know why? Privatization of the electric system(another of the points made on the movie) has given us none the less the most expensive electricty in all of latin america. On the bright side the city has grown a lot in the last 10 years, cannot deny this. As for the free trade agreement it has driven whatever local producers we had to bankrupcy(cannot compete anymore). It benefits the US tenfold what little it benefit us, plus the bankrupcy?
Edit:But I get what you mean though, in theory it should work. But corruption makes the funds go where they are not supposed to. And this is the case with the majority of LA.
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On October 08 2008 22:57 geometryb wrote:
oh hmmm. i see now. i was wrong.
it is impossible for everyone to pay back the interest. i guess sally has to declare bankruptcy, it wouldn't make sense for her to get a loan to pay back a loan she couldn't pay back. but does it start working out once enough people go bankrupt?
Once people start going bankrupt you have deflation......which means the money starts disappearing and the banks get all the collateral.
btw they changed the bankruptcy laws in 2005 so its not that easy anymore
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wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O
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On October 09 2008 10:41 VIB wrote:
wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O
a.) die of aids
b.) the reason for the focus is because it was the same argument fight or flight was making in the econ thread, so a lot of the same people are continuing that discussion here
c.) the rest of the movie is conspiracy theory
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On October 09 2008 10:41 VIB wrote:
wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O
Yeah I was annoyed by exactly this. But I would be more surprised if this was not the case. Its kinda like saying "here are a hundred reasons why you suck" then they heartily disagree with point number 42 ignore the rest and run off crying victory. Something to take heart of is that the more ignorant and the most stupid are generally the loudest, I expect that this thread is not indicative of the average level of intelligence, the wisest keep quiet and stay clear. It is evidence of the aggressive denial of Americans who live in a perpetual system of slavery through debt. Everyone else in the west at least lives in this same system, but we are not the ones to blame so we are more comfortable pointing the finger, and feel no obligation to defend that system.
As the movie comments those most comprehensively enslaved are those who falsely believe they are free.
C) It is a conspiracy theory therefore it is false. If you read a post I wrote earlier I will say it yet again. This preconception that conspiracy theories are false is a terrible thing, one should never assume this, particularly when said conspiracy theory involves money and power. Conspiracies revolving around this are a human constant, if it were not for this preconception those behind these conspiracies would have a much harder time getting away with there shenanigans.
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On October 09 2008 12:15 Choros wrote:Show nested quote +On October 09 2008 10:41 VIB wrote:
wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O Yeah I was annoyed by exactly this. But I would be more surprised if this was not the case. Its kinda like saying "here are a hundred reasons why you suck" then they heartily disagree with point number 42 ignore the rest and run off crying victory. Something to take heart of is that the more ignorant and the most stupid are generally the loudest, I expect that this thread is not indicative of the average level of intelligence, the wisest keep quiet and stay clear. It is evidence of the aggressive denial of Americans who live in a perpetual system of slavery through debt. Everyone else in the west at least lives in this same system, but we are not the ones to blame so we are more comfortable pointing the finger, and feel no obligation to defend that system. As the movie comments those most comprehensively enslaved are those who falsely believe they are free.
stop stroking yourself.
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On October 09 2008 12:16 ahrara_ wrote:Show nested quote +On October 09 2008 12:15 Choros wrote:On October 09 2008 10:41 VIB wrote:
wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O Yeah I was annoyed by exactly this. But I would be more surprised if this was not the case. Its kinda like saying "here are a hundred reasons why you suck" then they heartily disagree with point number 42 ignore the rest and run off crying victory. Something to take heart of is that the more ignorant and the most stupid are generally the loudest, I expect that this thread is not indicative of the average level of intelligence, the wisest keep quiet and stay clear. It is evidence of the aggressive denial of Americans who live in a perpetual system of slavery through debt. Everyone else in the west at least lives in this same system, but we are not the ones to blame so we are more comfortable pointing the finger, and feel no obligation to defend that system. As the movie comments those most comprehensively enslaved are those who falsely believe they are free. stop stroking yourself.
Yeah good comeback.
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yeah let's believe that super awesome movie even though no one in this thread can explain to me how money is created out of "thin air" and destroyed.
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this post probably wasnt called for
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Physician
United States4146 Posts
On October 09 2008 10:41 VIB wrote:
wow.... O.O this thread is amazing...
The movie talks about 20 different subjects, which of each one is further explained in the next. But then people start arguing about rather a linguistic generalization ("money = debt") present in the first few minutes, take it completely out of the original context, miss the point of the actual meaning of that linguistic detail by 86 light years, even tho the result of this discussion would be completely irrelevant to the conclusion of the movie in the first place.
But still, up to page SEVEN and people are still discussing this same irrelevant linguistic detail (and derived subjects), in almost EVERY post. Ignoring the whole point of the movie at all. I've read ALL posts here and NONE of them are talking ANYTHING that is relevant to the whole conclusion of the movie. Then some even post that it's the movie that is crap! omg..
Makes you wonder about the average IQ of public internet forums like TL... scary O.O
wonder? why the doubt? lol.. welcome to teamliquid general forums
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On October 09 2008 12:49 mahnini wrote:
yeah let's believe that super awesome movie even though no one in this thread can explain to me how money is created out of "thin air" and destroyed.
okay, I registered an account just so I can explain this. Try and follow me here.
Money being created out of "thin air" is a concept of the fractional reserve banking system.
Fractional reserve means that for every deposit you make at the bank, they hold onto a fraction of it in reserve while lending out the rest.
Lets assume the fractional reserve ratio is 10%
Say Albert deposits $100 into the bank. He gets a reciept that says he has $100 in his account.
The bank puts 10% of $100, or $10, into reserve. Where does the other $90 go?
Well, the bank turns around, and there just happens to be a guy, Brian, that needs $90. The bank lends it out to him.
Now what do we have? Albert thinks he has $100, and Brian thinks he has $90. $100+$90 = $190...
Now, lets take this a step further, Brian spends his $90 at a small business called Carlton's. Carlton's deposits that money into their bank account, and the bank holds onto 10% of $90 which is $9, and loans out $81 to the next guy... Darryl.
Albert still thinks he has $100, Carlton's thinks they are $90 richer, and Darryl thinks he just borrowed $81..... $100+$90+$81....
Now when Darryl pays back his loan, and Brian pays back his loan, we're back at $100.... but then again, that money just gets loaned out again, and it all gets so much messier when you factor in interest etc.
Point is, money is both created out of thin air and CAN be destroyed, but more of the latter than the former by far. This is actually one of the fundamentals of a capitalist economy... while the video made this idea sound quite sinister it also has benefits of efficiency: no capital is ever laying around idle, but rather is always in constant use/investment. This is why capitalist economies grow so fast.
The movie got some of its economics right, and some of it wrong. But one of the more remarkable things is that in its examples of fractional reserve banking, they used 10% as the reserve ratio when in reality it is something closer to 0.5%. The lower the ratio, the faster an economy grows, and the faster inflation grows too as money supply is increased exponentionally.
What is even more frightening that the video did not mention is that the bailout called for 0% reserve ratio, which essentially allows for unbounded growth of the money supply. This is what we call desperate monetary measures... it DOES provide more liquidity but at what cost? Hyper-inflation is to be expected... I'd keep going on and on but it's a very complex issue and nobody truly understands it, but this video raises very legitimate points.
Think about it, critcize it, but do it based on facts and research. Do NOT simply dismiss it.
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Oh, and the claim that money = debt has PLENTY of validity.
It should be plain for you to see with my example there... this is no big secret as the video makes it seem, its econ 101.
In a stable economy, most people are content with keeping their money in the bank. But when people lose confidence in the system and start withdrawing their money... well, its obvious that there's not enough to go around if everyone wanted their money back.
The entire system is based on everyone owing everybody else, or, debt backing debt, aka money = debt.
In a way, it provides a ton of liquidity for free enterprise, but when free enterprise overextends itself... blammo, subprime crisis 2008!
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that's just it though it's not really what people would say "out of thin air". that is it's not random or arbitrary with no records or repercussions. a liability account still exists to record this money the banks just don't make money for no reason whenever they please. also, i don't think what you explained was the full extent of how money supply is increased or "created".
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Fractional reserve banking is effective because it allows that initial deposit to be used more effectively, rather than just being hoarded in one account. The only case where it can fail is during a bank run, and it's become clear that central banks globally are willing to guarantee every cent of every deposit before allowing that to happen. It's a system with risks, but then what isn't. The alternative is a world without credit, which um, well enjoy.
edit:
To confuse fractional reserve banking with "printing money arbitrarily" (a rhetorical device the creaters of this video use to the detriment of your intellect) is just about the most ignorant thing you can say in this discussion. Please don't do it again. It makes you look ridiculous.
edit2:
I appreciate your posts gor.
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One more key point, just to clarify what i believe is the core of the subprime crisis:
i've explained how money is created, and i've explained how it can be destroyed.
money is created when a loan is taken out, money is destroyed when a loan is paid back.
when alot of people cant pay back their loans... like right now.... then the money supply never shrinks, everyone's just poorer because of it.
i mean, the system is already designed to be inflationary, but when loans dont get paid back, its so much worse.
while everything else about this is quite complicated, that much should be clear and simple to understand.
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On October 09 2008 13:28 gor56 wrote:
Oh, and the claim that money = debt has PLENTY of validity.
It should be plain for you to see with my example there... this is no big secret as the video makes it seem, its econ 101.
In a stable economy, most people are content with keeping their money in the bank. But when people lose confidence in the system and start withdrawing their money... well, its obvious that there's not enough to go around if everyone wanted their money back.
The entire system is based on everyone owing everybody else, or, debt backing debt, aka money = debt.
In a way, it provides a ton of liquidity for free enterprise, but when free enterprise overextends itself... blammo, subprime crisis 2008!
of course some money is borrowed money, in fact, being a credit based economy maybe most of it is borrowed money. that doesn't mean that we have to go all crazy claiming perpetual debt with little to no hard evidence aside from broad conceptual summaries.
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On October 09 2008 13:32 gor56 wrote:
One more key point, just to clarify what i believe is the core of the subprime crisis:
i've explained how money is created, and i've explained how it can be destroyed.
money is created when a loan is taken out, money is destroyed when a loan is paid back.
when alot of people cant pay back their loans... like right now.... then the money supply never shrinks, everyone's just poorer because of it.
i mean, the system is already designed to be inflationary, but when loans dont get paid back, its so much worse.
while everything else about this is quite complicated, that much should be clear and simple to understand.
you still haven't
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On October 09 2008 13:31 mahnini wrote:
that's just it though it's not really what people would say "out of thin air". that is it's not random or arbitrary with no records or repercussions. a liability account still exists to record this money the banks just don't make money for no reason whenever they please. also, i don't think what you explained was the full extent of how money supply is increased or "created".
no, you're absolutely right, it's not "out of thin air". Or at least, it's not "money out of thin air"
it's CREDIT out of thin air, but in my previous post, i elaborated on the consequences of people not paying back their loans. Although its not exactly "money out of thin air", it has the same effect of increasing the money supply.
If people don't pay back their credit, which was conjured out of thin air, then you still have the same problem of an inflated money supply, money or no money.
just to illustrate how bad things truly are: the derivatives market is estimated to be valued at $1 quadrillion while all the total assets in the world amount to only about $100 trillion.... there's clearly a problem here.
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On October 09 2008 13:32 ahrara_ wrote:
edit:
To confuse federal reserve banking with "printing money arbitrarily" (a rhetorical device the creaters of this video use to the detriment of your intellect) is just about the most ignorant thing you can say in this discussion. Please don't do it again. It makes you look ridiculous.
edit2:
I appreciate your posts gor.
I wasn't confusing the two, and I did point out that the film made errors. However, I find these to be technical details that only slightly detract from their main points.
Although printing money and fractional reserve banking are two different things, they both have the similar effects on increasing the money supply. Physical money isn't what we're talking about here when I say money supply btw...
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Ah I was referring to other people who have. Sorry!
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As for my review of the movie....
I can see why people would dismiss it as "conspiracy theory", and I agree it does seem like one.
However, alot of the points raised in the movie aren't new, nor are they part of some grand scheme by a group of shadowy conspirators.
Rather, one can study the history of political thought and all sorts of "Grand Theories" of politics/economics and piece together what this zeitgeist guy is trying to represent as a "Grand Conspiracy". Grand Conspiracy it is NOT though...
If you actually take the time to learn the economics and political theory behind all this, you will begin to understand these things as parts of a natural systemic processing of history driven by the forces of various systems... ie, the free market, the realist view of an anarchic international system, the rational actor model, mercantilism, liberalism, marxism,... they are all subjective interpretations of the same objectivity. Each emphasize different aspects of our systemic reality, but if you learn them all, you will realize that none are mutually exclusive.
What this movie presented was essentially a marxist critique of society... and while it is very powerful and highlights many truths, Marxism's weakest point has always been its focus on 'class struggle' which leads to theories of a conspiring superclass, when really, an expanded knowledge of econ and political theory can provide a much more convincing systemic explanation.
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ps. in other words, what im trying to say is that the corruption of our current system is a reflection of humanity's own corrupted nature. The world isn't so black and white as *some* (ahem, bush administration) try to make it seem.
Free markets can be a force of liberation OR oppression, depending on how markets are applied.
Fractional banking can provide liquidity and thus a vibrant economy OR it could lead to inflation and thus destruction of wealth of everyday people
Just like guns could be used to attack or defend....
OH and one thing to the guy who brought up comparative advantage:
Yes everybody has a comparative advantage but focusing on your comparative advantage isnt always the best thing.
Take Japan for example, before modernization. Their comparative advantage? Fish. Now according to your argument, they should stick to fishing right? But where would they be now?
What Japan did was it used protectionist policies to nurture infant industries in manufacturing etc. These protectionist policies allowed these infant industries to grow into strong industries that could finally compete on the global free market. To sum it up: Japan created its own comparative advantage.
If Japan had depended on fish, it would have never diversified its economy and instead would've been dependent on a commodity. That's bad, 'cause it's vulnerable to price changes and also problems of sustainability. Japanese should be happy they diversified their economy by protecting against free trade.
How can free trade be used as a form of oppression? Just take a look at Nigeria... big oil companies come in and "help" Nigerians make use of their "comparative advantage"... but in the process they've destroyed an entire culture of self-sustaining agriculture and has created a lucrative economy in the short-term based on oil, but has in effect destabilized the economy by making it dependent in the long run. Some would even argue that the oil companies have more power than the Nigerian government.
hope that clears some things up
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in sum: comparative advantage is good for the short term
but for long-term resilience, an economy should "manufacture" its own comparative advantage by diversifying and nurturing infant industries.
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On October 09 2008 14:12 gor56 wrote:
in sum: comparative advantage is good for the short term
but for long-term resilience, an economy should "manufacture" its own comparative advantage by diversifying and nurturing infant industries.
That is what i tried to explain. But you did it better  .
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On October 09 2008 16:01 Boblion wrote:Show nested quote +On October 09 2008 14:12 gor56 wrote:
in sum: comparative advantage is good for the short term
but for long-term resilience, an economy should "manufacture" its own comparative advantage by diversifying and nurturing infant industries. That is what i tried to explain. But you did it better .
Yeah, all I'm trying to do is show that the arguments of liberalism (free market), mercantalism (state intervention/protectionism), and marxism (distribution) aren't mutually exclusive ideologies of economy, but rather are 3 subjective interpretations of 1 objective economic reality.
For developed states with strong economies, of course it's in their best interest to pursue freer markets.
For developing states, mercantalism makes alot of sense when you're considering the survival of a nation-state and its political independence/sovereignty.
Marxist critique of capitalist society keeps capitalism in check and is a watch-dog perspective promoting fairer distribution.
The way I see capitalism and free markets is that markets are like a powerful beast... wild, it can create lots but also destroy lots, but when tamed, its productive powers can be harnessed for benefit of all rather than the polarization of society.
The worse thing you could ever do to yourself intellectually is confine yourself to a narrow paradigm like many do with these economic perspectives. Recognize that they are all powerful arguments for very different reasons and you will see the tensions that drive political and economic history.
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gor56
thats alot of text
and your completely missing the point
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On October 09 2008 17:02 brambolius wrote:
gor56
thats alot of text
and your completely missing the point
wat.
he's right. you can only have a free market to an extent much like you can only have democracy to an extent or shit just tends to get out of hand.
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On October 09 2008 16:40 gor56 wrote:Show nested quote +On October 09 2008 16:01 Boblion wrote:On October 09 2008 14:12 gor56 wrote:
in sum: comparative advantage is good for the short term
but for long-term resilience, an economy should "manufacture" its own comparative advantage by diversifying and nurturing infant industries. That is what i tried to explain. But you did it better . Yeah, all I'm trying to do is show that the arguments of liberalism (free market), mercantalism (state intervention/protectionism), and marxism (distribution) aren't mutually exclusive ideologies of economy, but rather are 3 subjective interpretations of 1 objective economic reality. For developed states with strong economies, of course it's in their best interest to pursue freer markets. For developing states, mercantalism makes alot of sense when you're considering the survival of a nation-state and its political independence/sovereignty. Marxist critique of capitalist society keeps capitalism in check and is a watch-dog perspective promoting fairer distribution. The way I see capitalism and free markets is that markets are like a powerful beast... wild, it can create lots but also destroy lots, but when tamed, its productive powers can be harnessed for benefit of all rather than the polarization of society. The worse thing you could ever do to yourself intellectually is confine yourself to a narrow paradigm like many do with these economic perspectives. Recognize that they are all powerful arguments for very different reasons and you will see the tensions that drive political and economic history.
This is true. It is a terrible thing really how so many economists in powerful positions fail to realize that every economic policy has its uses, sometimes the free market is appropriate but this is a wild beat and betterment for the people is only achieved by harnessing its energy. 'mercantalism' in my opinion should always be the base upon which liberalism should come in place when and only when appropriate. In this way you achieve strategic objectives which exist beyond the purview of the free market whilst also harnessing as much free market efficiency as possible. Marxism I think its largely useful as a crisis tool. When stuff is goes really badly total state intervention can be the only alternative and it should never be disregarded.
Much of the reason this tragedy has happened because for short sighted political benefit they create this impression that there is socialism which is evil and bad and there is capitalism which is competent and moral effectively demonizing any economic policy which does not benefit corporate profits in the short run. The McCarthy trails are perhaps the most profound evidence of this in western cases, to even suggest that state intervention may be appropriate was criminal.
Such ideological considerations are irrelevant and undermine the capacity of management bodies to actually dictate policy effective policy. We would not have gotten into this economic mess if we never had ideology over ride what is appropriate in terms of pure economics which actually does inherently involve benefiting the people as any policy which only benefits the few is unsustainable in my opinion and the better the people is to better the health of the very fabric of your economic system.
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On October 09 2008 13:34 mahnini wrote:Show nested quote +On October 09 2008 13:28 gor56 wrote:
Oh, and the claim that money = debt has PLENTY of validity.
It should be plain for you to see with my example there... this is no big secret as the video makes it seem, its econ 101.
In a stable economy, most people are content with keeping their money in the bank. But when people lose confidence in the system and start withdrawing their money... well, its obvious that there's not enough to go around if everyone wanted their money back.
The entire system is based on everyone owing everybody else, or, debt backing debt, aka money = debt.
In a way, it provides a ton of liquidity for free enterprise, but when free enterprise overextends itself... blammo, subprime crisis 2008! of course some money is borrowed money, in fact, being a credit based economy maybe most of it is borrowed money. that doesn't mean that we have to go all crazy claiming perpetual debt with little to no hard evidence aside from broad conceptual summaries.
Perpetual debt is guaranteed so long as your rely upon expansionary monetary policy to sustain the level of demand in your economy. Debt has become unsustainable and like it or not, whether through concerted action or dragged kicking and screaming our debt levels must be reduced and there is nothing we can physically do to prevent that from occuring.
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On October 09 2008 14:00 gor56 wrote:
As for my review of the movie....
I can see why people would dismiss it as "conspiracy theory", and I agree it does seem like one.
However, alot of the points raised in the movie aren't new, nor are they part of some grand scheme by a group of shadowy conspirators.
Rather, one can study the history of political thought and all sorts of "Grand Theories" of politics/economics and piece together what this zeitgeist guy is trying to represent as a "Grand Conspiracy". Grand Conspiracy it is NOT though...
If you actually take the time to learn the economics and political theory behind all this, you will begin to understand these things as parts of a natural systemic processing of history driven by the forces of various systems... ie, the free market, the realist view of an anarchic international system, the rational actor model, mercantilism, liberalism, marxism,... they are all subjective interpretations of the same objectivity. Each emphasize different aspects of our systemic reality, but if you learn them all, you will realize that none are mutually exclusive.
What this movie presented was essentially a marxist critique of society... and while it is very powerful and highlights many truths, Marxism's weakest point has always been its focus on 'class struggle' which leads to theories of a conspiring superclass, when really, an expanded knowledge of econ and political theory can provide a much more convincing systemic explanation.
When I talk on rare occasion with the radical socialists at university I come to the same conclusion; they are very good at pointing out our problems but not so good at dealing with them. I would reform the system, they would throw the entire system out the window and build something from scratch.
Grand Conspiracy this MAY BE in my opinion. There are shadowy organizations which exist beyond the jurisdiction of state and whose interests know no international boundary I THINK the Carlyle group may be one I'm not sure there are plenty of this 'conspiracy theories' easily accessible who go into detail about all this I couldn't be bothered finding it myself at the moment. The incentive exists for such a conspiracy to be a reality when entities have sufficient power to make it so incredible profits can be gained. It is un-deniable such organisations exist the only question is what exactly do they get up too and this is basically speculation. The existence of these groups is not by definition a bad thing but if they are driven purely by greed (which i do not actually think is the case) then it almost certainly is.
You comment that our system is essentially a slow development through history. This is true ofcourse and it may be that there are nothing driving toward a 'bad' outcome behind the scenes but it would appear in my opinion that there are shadowy elements who do try to casually and gradually shape events. They do this by providing support to political parties who support their economic agenda for example. This has made a situation develop today where the Republican party ignores economic policies which are appropriate and instead promise vast tax cuts to corporations and suck funding out of the real economy to pay for it. The United States political system is openly corrupt. It is public knowledge corporations provide campaign funds to candidates, profit maximising entities only make contributions expecting a return.
That this is effectively a grand conspiracy is unlikely, rather a system relatively isolated in direct intervention but grand in the extreme in implication. This outcome is a very real prospect and it is a reality in my opinion. One can trace various players in all this like for example Friedman economics which provide the basic justification for these economic policies whilst stifling debate by saying 'I am an economist, economics is a science, you do this and this will happen you do that that will happen' and they throw in economic mumbo jumbo to make themselves seem smarter than they are. A CEO says you workers have to accept lower wages and its sus, an economist says the same thing with said mumbo jumbo and it gives it a whole new air of authority.
Corporations lach onto these economists and ensure their voices are the ones heard and followed.
The fact that the Bush administration made it law that you can arrest an American citizen without evidence or trial and hold them for life in an offshore torture camp, plus the very real economic policies which has forced wealth out of the hands of the many and into the few casts a whole new light on an already very sus environment. There is now a 150,000 man mercenary army funded by the United States called 'Blackwater', a paramilitary organization who will fight for corporations in the further proliferation and maintenance of corporate objectives which is profit with a total disregard for social and economic impacts if it ever comes to that.
On that note ill say thank god for the right to bear arms as these 150,000 cannot control hundreds of millions with military grade weapons. The United States may have to fight for their freedom once more.
The Liberty and Freedom of the American people is at risk and their democracy has been stolen in the dead of night, the September 11 conspiracy again takes on new meaning in this context.
At the end of the day it is hard for anyone to say for sure whats really going down, but there is very good reason for genuine alarm. These forces act in many spheres, the social, the economic, and the geopolitical and domestic politics also. There is much blurring between the lines. I think ultimately the implications of all this are that we live in interesting times, and for better or for worse this systems days are numbered. Whether good or bad will triumph cannot be predicted but likely it will be a bit of both.
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First off, let me just say that after reading everyone's posts, it is obvious that many of you are more well-versed in some economic areas than I am, and I enjoy your discussion on these very basic ideas I am presenting.
On October 09 2008 17:27 Choros wrote:Show nested quote +On October 09 2008 13:34 mahnini wrote:On October 09 2008 13:28 gor56 wrote:
Oh, and the claim that money = debt has PLENTY of validity.
It should be plain for you to see with my example there... this is no big secret as the video makes it seem, its econ 101.
In a stable economy, most people are content with keeping their money in the bank. But when people lose confidence in the system and start withdrawing their money... well, its obvious that there's not enough to go around if everyone wanted their money back.
The entire system is based on everyone owing everybody else, or, debt backing debt, aka money = debt.
In a way, it provides a ton of liquidity for free enterprise, but when free enterprise overextends itself... blammo, subprime crisis 2008! of course some money is borrowed money, in fact, being a credit based economy maybe most of it is borrowed money. that doesn't mean that we have to go all crazy claiming perpetual debt with little to no hard evidence aside from broad conceptual summaries. Perpetual debt is guaranteed so long as your rely upon expansionary monetary policy to sustain the level of demand in your economy. Debt has become unsustainable and like it or not, whether through concerted action or dragged kicking and screaming our debt levels must be reduced and there is nothing we can physically do to prevent that from occuring.
True, I don't even see how you can even present "hard evidence" for something as self evident as this. What about a historical graph of the components of the money supply? The debt is not only perpetual, but perpetually increasing...
The sub-prime lenders which everyone disdains are simply the ones who got caught on the losing end of this thing. They were one of the last debt-sinks which allowed the money supply to increase, and they happen to be the weakest link right now. There is not enough money for everyone to pay of their loans, so they are the first to go.
mahnini, you have been asking about how money is created out of thin air. You mistake the structured process of this money creation with the validity of it. Essentially, however much debt we can sustain determines how much money can be created out of thin air by the banking system as a whole.
For a clear explanation, refer to the graph below which I keep posting:
![[image loading]](http://upload.wikimedia.org/wikipedia/en/thumb/9/95/Components_of_the_United_States_money_supply2.svg/570px-Components_of_the_United_States_money_supply2.svg.png)
Now, observe something. All of the green is actual, real money. All of the gray represents real, physical collateral which is owed to banks. They are houses, hotels, farms, schools, companies, and much more. Literally trillions of dollars worth of assets. All of which are owed to banks. In fact, the amount of stuff owed to banks far exceeds the amount of physical money out there.
The only way this is possible is if the banks obtained the rights to that collateral without actually putting up valid consideration. You see, you sign your property over to the bank and they give you money which they don't actually have. Remember, the gray on that graph only exists as digits on a computer.
So essentially, the "thin air" part comes from the fact that you trade something physical for the bank writing something on a balance sheet. Yes, it is a structured procedure. But the very fact that more can be owed, orders of magnitude more, than there is money in the economy shows that something is being created out of thin air, or else you would need an equal amount of value for the value of the collateral being offered.
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I think we can all agree that our actual system essentially benefits greed over any kind of ethic or altruistic behavior and that's basically the core of the problem, granted that this greed is already within our nature. There's no need for a concrete conspiracy ("the men behind the curtain" for instance) for this system to be so corrupted; the sole rule of the maximum profit is enough for these inhumane acts to be perpetrated by anyone who's got the power (money) to do so, and who's of course willing to do anything to keep the establishment. Expecting corporations to act ethically is essentially wrong, because we can be sure that anything they claim to do ethically will only be a mask to hide their true brutality and lack of ethic.
So, if we concur that greed is within our nature and that being in a system that rewards avarice just feeds and corrupts that part of our nature then there's only two ways of solving that problem in my opinion:
a) Having a strong education that helps people realize this and act consequently, and teaches us how to think by ourselves and not be another brainless guy following the established system like a sheep. But that doesn't really solve much since we all know the importance of education and yet it is how it is today...
b) Building a system that prevent those things from happening which I guess it's the most difficult part to accomplish. There are so many political views and perspectives that being able to find the one that more or less suits us all is practically impossible.
Given the nihilistic indifference the majority of people have towards our social and political problems, all of this more of an utopian dream than a possible future reality.
As for what I think would be our best system, Bakunin already said:
"Liberty without socialism is privilege, injustice; socialism without liberty is slavery and brutality".
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On October 09 2008 17:02 brambolius wrote:
gor56
thats alot of text
and your completely missing the point
What point am I missing?
Choros: I agree with most of what you're saying. The short response is that, when I say that nothing is a "grand conspiracy", I'm not dismissing the fact that a few shadowy groups do exist that are quite powerful. I can name a few myself (Olin foundation anyone?) However, they are not so powerful that they control everything... they do what they can to 'nudge' things in their favor.
I'm saying that these shadow groups, along with governments, corporations, and everyday people... are all just acting out their rational self-interests, much in the same way a consumer acts in rational self-interest, even Stalin, Hitler, Mugabe... the great thing about the rational actor model is that we can apply it to almost anything
While it is possible that this could all be a grand conspiracy, the conspirators would have to be much more cohesive to convince me that it is"grand" at all. My paradigm places class at the center of the picture, where the elites all share common interests and the majority of us...well, most of us just work, consume, and die. Through that perspective, it does seem like there's a grand conspiracy as it paints a neat "us vs them" picture. However, I'm pretty sure the elites are not as monolithic as these conspiracy videos make them sound. I applaud the videos for revealing the extent of their connections and powers, but clearly, they are not omnipotent.
That being said, what IS most omnipotent is quantified logic which dominates our world. The video mentions this briefly but I wish they could've expanded on it, I'll go into it more later.
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On October 09 2008 19:00 kemoryan wrote:
a) Having a strong education that helps people realize this and act consequently, and teaches us how to think by ourselves and not be another brainless guy following the established system like a sheep. But that doesn't really solve much since we all know the importance of education and yet it is how it is today...
Thus the importance of the education system. There have throughout a very long period of time i.e thousands of years, educational systems which have attempted to infiltrate ideological beliefs upon young people to shape their long terms beliefs as well ofcourse with attempting to convert the older but this is less important. A contemporary example are the schools sprouting up by the thousand in the tribal regions of Pakistan bordering Afghanistan, schools which teach there students to fight and die for Allah and schools which indoctrinate their students to follow a belief system which tells its students that their women are little better than cattle who cannot be trusted to go out on their own without male supervision. Another clear example is the Japanese education system which led to the fanaticism in world war two by teaching students to fight to the death for the emperor etc. The power of the education system cannot be under exaggerated.
The poor funding of the American education system appears to be part of a concerted effort to control the masses (this is not necessarily the case and may be the product of happenstance but i am inclined to believe that atleast to some extent there are other hands at work). You have a bad education system combined with a ridiculously poor media, the people don't know what the fuck is going on and often will actively support policies which go against their interest. Its as simple as that. Then you distort both these mediums and you can effectively manipulate the perceptions of whats going on to your own benefit. Individuals however understand the true state of their economic system and this can only be disguised so far. If the situation degenerates considerably a frightening prospect of absolute chaos and bloodshed exists due to the extent of armaments along with the fractionalisation of American society, you have got the Mexicans (who still refer to California, New Mexico etc as the occupied states, recalling the agressive American invasion and annexation of these regions) along with the blacks the hicks etc. If it all goes to hell it may be bloody in the extreme but at the end of the day the founding fathers were revolutionaries and this may be the appropriate response once more.
During the French revolution the French basically rounded up all their rich people and cut off their heads. They have had one of the highest standards of living on the planet ever since, and all neighboring nations increased the quality of lives of their people out of fear that there people would revolt, it is in the capacity of the wealthy to increase the standard of living of all its just a matter of making it in their interest this can be achieved, through peaceful methods also. But the lesson the the French revolution should never be forgotten.
The United States has created an ideology which says that the United States is the land of opportunity, if you try hard enough anybody can become incredibility rich. Therefore if you are not rich it is because you are lazy. If you are lazy why should the state help you? It is your own fault. This is clearly not the case, there is a serious distortion which allows the perpetuation of a system which creates enormous income inequality. A system which allows the rich provide less assistance to the populous than any western nation since the French revolution.
The best thing however is that the armament of the population alongside with the indoctrinational belief in freedom and liberty means that you can say to a soldier that your fighting in Iraq for freedom and they will fight with their lives, but can you ask them to shoot American civilians in the name of freedom? It's not going to work it is as simple as that, the Black Water private army simply is not enough to be able to control an armed population.
The diabolical forces behind all this are not stupid. They have been deceived in terms of economics just like so many others have. It is not in there interest to destroy the global economy, but some economists appear to be clinically insane yet they sound reasonable and they enjoy comfortable support.
b) Building a system that prevent those things from happening which I guess it's the most difficult part to accomplish. There are so many political views and perspectives that being able to find the one that more or less suits us all is practically impossible.
On this point I completely disagree. I believe that competent policies will by definition itself benefit all and they thus should enjoy bipartisan support. The problem is not the capacity nor the knowledge to actually create a decent system, and then improve it once more and time and again until that ultimate economic system is a reality. The problem is the fact is politicians are not economists (not that being an economist will help much of the time), They exist is a situation where you are incredibly constrained in the real actions that you can take. We must reform our economic system yet there seems to be no one with the authority to do so, and the fact that all western states agree allows complacency in domestic politics.
Given the nihilistic indifference the majority of people have towards our social and political problems, all of this more of an utopian dream than a possible future reality.
In my opinion the indifference is caused by two factors. 1) The lack of competent alternatives. People look at politics, see a bunch of idiots and give up. 2) The lack of incentive.
If the situation deteriorates then people will suddenly ask why, and what can be done. People will suddenly demand the changes which are necessary and hopefully we will be in a good enough state to make this a reality.
As for what I think would be our best system, Bakunin already said:
"Liberty without socialism is privilege, injustice; socialism without liberty is slavery and brutality".
And any system without liberty is unsustainable. It involves sucking wealth out of your economy without replacement, and it involves the wealth of your nation existing primarily in a fantasy realm alongside perpetually increasing debt to create the illusion of subsistence. 3% of American money is actually real. The economic solution inherently involves liberty and justice for all and a good standard of living which reaches to even the lowest of society. The key is freeing politics and economic management from ideological arguments which defy true logic and ignore genuine debate.
We should never forget Thomas Jefferson who said that "The greatest threat to liberty are the money lenders who pose a far greater threat than any standing army". Debt cannot be ignored and we must reduce it now lest we condemn ourselves to becoming little more than slaves.
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the great thing about the rational actor model is that we can apply it to almost anything
While it is possible that this could all be a grand conspiracy, the conspirators would have to be much more cohesive to convince me that it is"grand" at all.
Yes it is most likely that it is not a grand conspiracy yet the combined effort of powerful entities perusing greed focused ambition is grand in implication, and grand in solution. Although the policies themselves may seem rather non-radical.
My paradigm places class at the center of the picture, where the elites all share common interests and the majority of us...well, most of us just work, consume, and die. Through that perspective, it does seem like there's a grand conspiracy as it paints a neat "us vs them" picture.
This type of picture is basically the norm in any type of conflict. The Buddhists say that in conflict you will inevitably adopt that which you hate in your enemy. For example the slaughter of civilians by strategic bombings in world war two by the western powers. The 'bad guys' will not hesitate to to enleash pure propaganda, so what if the 'good guys' are a bit propagandist in turn?
However, I'm pretty sure the elites are not as monolithic as these conspiracy videos make them sound. I applaud the videos for revealing the extent of their connections and powers, but clearly, they are not omnipotent.
I think their power is actually quite fragile. It exists within the media and as this quiet influence but it is highly lacking in terms of physical power. Their brazenness of late defies logic, assuming they don't know something we aren't aware of. But again I believe this is because they have been deceived just like everyone else about the sustainability of this system.
That being said, what IS most omnipotent is quantified logic which dominates our world. The video mentions this briefly but I wish they could've expanded on it, I'll go into it more later.
Qualified logic is almost omnipotent in potential, but its omnipotence does not translate by definition into actually being followed. So often our actions defy logic, it is possible for us even under bad case (worst case involves everyone spontaneously rolling over dieing in effect) circumstances to achieve a society the likes of which we have only seen in science fiction yet now it is a scientific and theoretical reality. It even exceeds the dreams of those science fiction writes of decades past.
We must separate ourselves from these oil companies and others who actively prevent development. We should be happy that this is actually happening. For example general motors are releasing an electric car. The rising cost of oil has applied pressure on the car firms are created innovation so congrats to the free market, but we cannot achieve what we really want without strategic direction which only the government can provide. Those at the top must realize that change is inevitable and thus will support it. The fact is that there have been great civilizations before and they haven't survived under similar circumstances, concerted action must be taken.
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On October 09 2008 18:15 fight_or_flight wrote:
Now, observe something. All of the green is actual, real money. All of the gray represents real, physical collateral which is owed to banks. They are houses, hotels, farms, schools, companies, and much more. Literally trillions of dollars worth of assets. All of which are owed to banks. In fact, the amount of stuff owed to banks far exceeds the amount of physical money out there.
The only way this is possible is if the banks obtained the rights to that collateral without actually putting up valid consideration. You see, you sign your property over to the bank and they give you money which they don't actually have. Remember, the gray on that graph only exists as digits on a computer.
So essentially, the "thin air" part comes from the fact that you trade something physical for the bank writing something on a balance sheet. Yes, it is a structured procedure. But the very fact that more can be owed, orders of magnitude more, than there is money in the economy shows that something is being created out of thin air, or else you would need an equal amount of value for the value of the collateral being offered.
this is so wrong.
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arguments and debates on TL would be a lot less complicated, and less informed people would get a lot less intellectual beatdowns; if there were a part of everyone's profile that listed their academic qualifications...I know from personal experience lol.
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All I gotta say is that I'm both highly suspicious of this "zeitgeist movement" and excited by it at the same time... the possibility of revolution is always exciting but we should always worry about how it'll be carried out. That, and there are lots of conspiracy theories about zeitgeist itself. Be vigilant in choosing your teachers and leaders guys. Come up with your own conclusions and solutions... your own critical reasoning is the only thing that can defend you from deception.
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i just wanted to drop by and cheer everybody on and assure everyone that replied to me with giant walls of text i will be getting back with them sometime in the future.
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Cayman Islands24199 Posts
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