04-02-13, 10:22 PM #1
Money, money, money.
So I've been watching some political documentaries about central banking and have discovered the TRUE rulers of the world are the owners of these banks.
What's happening, for those of you unaware, is that every dollar printed is LENT to the government requesting it at INTEREST. This means that every dollar is created out of debt. Now the only way to pay off this debt is to make more money but this in turn creates even more debt.
The real problem though, if that isn't bad enough, is that because of this system of debt even if every dollar was rounded up and given back to the banks there would still be more debt then there was money.
Now then getting to the point, if there is no way to ever repay this debt how can we ever stop using currency? Would it be possible to simply discard the monetary system altogether? and what kind of horrible fallout will this end up causing from the central banks?
Edit: Probably should have put this in Economics, my bad - It's been too long since I posted!
04-03-13, 06:13 AM #2if there is no way to ever repay this debt how can we ever stop using currency?
Would it be possible to simply discard the monetary system altogether?
what kind of horrible fallout will this end up causing from the central banks?
04-03-13, 10:18 AM #3
Much of the modern economy money is smoke and mirror money. You do not have to make anything real, to make money. One can speculate what might occur, whether it occurs or not, and stock prices can change and wealth will be created or destroyed. It is not like you have to make an automobile and the amount of money is dependent on value added in real terms. One can make up value in an imaginary world and money appears.
Someone important could say this neighborhood is now terrible, causing all house prices to go down. The physical assets are the same, but the change of subjectivity would have caused magic money to disappear. There may be a school of thought that since money can be subjective/magic and not necessarily connected to physical resources (house prices rise and fall but houses remain), then debt can also be based on magic money. This could explain the shift from the gold standard, which is tangible, into paper which is more about subjective fantasy (paper plus ink is worth little unless we make pretend and all agree).
The problem with the fantasy money theory of debt is there are also nightmares in fairy tales. The princess does not always marry the handsome prince and live happily ever after, although this is being pitched. There are evil witches in fantasy money world, which drink of the same stream of magic money (EU and Greece).
One way to make it more tangible and less fantasy is to add more accountability to debt, where those who put us all at risk, have to pay if there is a nightmare. The way it is set up, is an incompetence and thieves paradise. As the rules stand, one can use fantasy debt to make grow their own power (buy votes) fir future fantasy money, while eliminating all accountability for being incompetent or a thief if wicked witch comes to get her share.
With accountability, if the debt fantasy world comes back to bite the country, all assets of those who played the game, will be taken. We could also put jail time on the table, if there are direct pain and suffering due to the nightmare money fantasy. If there is no accountability, why not let the fantasy go, if one is able to cash in on the deal without any fear of loss.
04-03-13, 04:02 PM #4
I hear these sorts of paranoid conpiracy theories a lot, and yet have never seen the evidence supporting them (a reference to a crackpot documentary a la "Zeitgeist" is not a "credible source", though if you know of one that refers to evidence that I can attain, I'm happy to look at that evidence).
The U.S. government (or any government using fractional reserve banking) can also choose to lower its reserve requirements, which allows private banks to create money by lending it to others (*not* the government, by and large), but a bank can only do this is it holds a (usually sizable) multiple of other money in reserve in deposits. Admittedly, though this system works in part because there is a base of currency (actual printed bills and money created through open market operations) that the government can also create, debt-free.
Now the Fed can also create money through open market operations and that is more complicated, but (conspiracy theories being ignored) it is itself controlled by the federal government. I could go into how the Fed's open market committee process, but since no one who thinks this is a conspiracy will read it with an open mind, I feel like I might be wasting my time.
$1.6 trillion in public debt and about $10.4 trillion in the M2 money supply (which isn't even the whole money supply...the government just stopped reporting on M3 and M4 is even harder to determine).
Still, maybe you are counting public and private debt, and/or have some reason for not counting M2, M3 or M4). There is $2.5 trillion in the M1 money supply. How to determine the total private debt I do not know...but I would say that M1 is probably not the right measure of available cash.
Obviously, though I am skeptical of whole premise.
04-03-13, 04:50 PM #5By "this debt" we can assume you mean the debt created by printing money, which has not been demonstrated to exist...
04-03-13, 05:43 PM #6
Now then getting to the point, if there is no way to ever repay this debt how can we ever stop using currency?Would it be possible to simply discard the monetary system altogether?and what kind of horrible fallout will this end up causing from the central banks?
Sounds to me like you have some vague idea that what you are reading about is "bad", but don't really understand what the point is and why it isn't. In fact, it is a highly functional economic system that is a key enabler of modern civilization.
04-03-13, 07:34 PM #7
Americans would love to have 35% from their deposits taken off, I am sure they will be just as quiet and accepting now as they are to stealing of money from Cyprus banks.
04-03-13, 07:36 PM #8
None of that matters. Creating money, in any form, can deprecite the value of the dollar, but that a bond is involved is neither here nor there. money neither creates nor destroys "real" value or wealth. In essence, and to oversimplify, imagine that the economy has a $100 trillion worth of goods and services available at t=0 and a money supply of $1 trillion. Suppose those goods and services are constant, but at t=1 the money supply has doubled. The real value of the economy is unchanged, but the value of each dollar will be cut in half. Money has depreciated, but all the means is that, to close any transaction at t=1 you now need different (doubled) denominations in your pocket than you did to close the same transaction at t=0.
Suppose the gods and services and the money supply is constant, except that the government issues a bond at t=1. The government gets $1 million for the bond and agrees to pay the holder $10 million at t=2. What is the real value of the economy at t=1? Assuming the transaction cost of issuing the bond were $0, it's slightly higher than $100 trillion, since the bond adds some value (as it has some utility as a cash flow management tool). The $1 million paid for the bond isn't "new money" though, it's money that was already a part of the original $1 trillion that already existed at t=1.
The depreciation that occurs comes from printing money faster than the rate at which the real economy grew (0% in my assumptions).
So long as the product of (A) the real economy x (B) the average income tax rate grows faster than the amounts payable in respect of that bond, the system works fine. In the real world the real economy general has historically grown over time, at least in the long run. So new value was created. That would lead to deflation of the currency unless the money supply concurrently expanded at the same or a greater rate.
Money is not debt. Money is a a medium of exchange, and it can easily extinguish debt. The classic hypothetical is:
A traveller enters a small town, looking to rest. He enters a small hotel, but tells the owner that he'd like to see the rooms before he commits. As a good faith deposit, he leaves the owner a $100 bill then goes upstairs with a key. As soon as the man departs, the hotel owner rushes out with the $100 and goes next door to the grocer, to whom the hotel owner owes $100, and pays off the debt. The grocer rushes out with the $100 and goes next door to the cabinet maker, to whom the grocer owes $100, and pays off the debt. The cabinet maker rushes out with the $100 and goes across the street to the dentist, to whom the cabinet maker owes $100, and pays off the debt. The dentist rushes out with the $100 and goes to the local prostitute, to whom the dentist owes $100, and pays off the debt. The prostitute rushes out with the $100 and goes to the hotel, and pays the hotel owner the $100 she owes him.
At that moment the traveler comes back to the hotel lobby and tells the owner tht the rooms are inadequate. He takes his $100 back and leaves.
Debts were extinguished all over the town in that story.
04-04-13, 07:47 AM #9
04-04-13, 12:16 PM #10
04-04-13, 01:00 PM #11
Actually the real true rulers of the world are the media elites who own the Internet and regulate what's sent across their servers. They control every bit of information you get outside of independent newspapers, analog TV and radio, and all those are disappearing fast. That's why you never see any information on the Net about them and their abuse of power.
Actually the people who control us are the captains of US industry, who can inflate or destroy the economy by merely issuing press statements. Ever wonder why they don't use that power to keep the economy going, but instead on occasion use their power to destroy it through dismal predictions? It is because they are lining their pockets via the misery of the working class.
Actually the REAL people in charge are . . .
I see many such theories about "who's really in charge" posted. Not too much to support them though.
04-04-13, 01:07 PM #12
If the Federal Reserve has been irresponsible in its management of the money supply we would have seen great inflation or recession and depression, and we have seen neither. That is the problem for right wingers, they have been preaching immediate doom and gloom, socialism, Marxism, for 4+ years now, it hasn’t happened.
The Fed can expand the money supply by buying assets, as it has been doing. And it can contract the money supply by selling those assets. It can also restrict the money supply by increasing the banking reserve requirements which reduces the amount of money in the economy. It can also constrain the money supply by raising the interest rates it charges member banks for loans it provides to them.
EU member states like Greece can go bankrupt because they cannot manage their money supply as we do in the US. Greece does not have a central bank like the Federal Reserve to bail them out in an emergency. Greece signed away its ability to manage its money supply when it joined the EU. Greece did as you and your fellow conservatives have advocated. It did away with its central bank. Cyprus is in the same boat.
Yeah, you can replace the US dollar. But why would you want to and what would you replace it with, and why would it be better? The current US monetary system works just fine. If it didn’t we would be in the midst of another Great Depression at this very moment. The Great Recession of 2007-2009 would have been a great depression and we would still be in a deep depression. Banks and businesses would have collapsed. Depositors would have lost their deposits. Retirees and employees would have lost their retirement savings. Businesses, governments and individuals would not have been able to pay their bills were it not for the actions the Fed took in 2008 and 2009.
The record is very clear, we have almost a century of data, since the creation of central banks and the implementation of Keynesian economic policies, our economy has been much more stable. Recessions have been less frequent and less severe. Inflation has been much less severe. And periods of economic growth have been longer and greater. That is the record. That is reality.
Last edited by joepistole; 04-04-13 at 11:07 PM.
04-04-13, 03:03 PM #13
The Federal Reserve does purchase US Treasury obligations in the secondary markets. And if the Fed should purchase US Treasury notes, the US Treasury does not make interest payments to the Fed. It would be like writing yourself a check and depositing it back into your account. Now how much sense does that make?
The slippery slope you described just doesn’t exist. The government doesn’t buy money from itself. The government can create money by purchasing assets. Assets that it can later sell if need be. So every action taken by the government to expand the money supply can be reversed. WOW, what a revelation!
The government expands the money supply by purchasing assets. And it contracts the money supply by selling those assets. It is really quite simple. There is no conspiracy no matter how much right wingers need or want there to be one. And it is not against the law.
04-04-13, 03:20 PM #14
You know, in all my years in business I never had an employee ask me if the paycheck I provided them was from borrowed funds because they wanted to make sure their paycheck was real. I never had a vendor ask me if the funds used to purchase their goods were borrowed because they wanted to make sure the payment I provided them was real and not from fantasy money. And I never had anyone refuse to take my money because it was borrowed. The money wasn't any less real to them.
Money is a resource, just like copper, oil and gold. The whole point of capitalism is the efficient use of resources. Capitalism is renowned for how well and efficiently it allocates capital, hence the term “capitalism”.. Money in a capitalistic system is reallocated through a financial system that includes banks. It takes excess money and puts it to work in other areas where it is needed. It’s called efficiency. It’s called capitalism. It is a good thing, not a bad thing.
04-05-13, 12:16 AM #15
Oh well, it was fun while it lasted
ZeroHedge years ago:
It is a slow day in a little Greek village, planet earth. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner thinks about maybe beating the tourist to death, but decides to give him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and shoves it in his pocket. He owes Piraeus Bank down the street €100,000 but has little intention of repaying it as his business has been contracting for several years. That bank also has claims of €10,000 on a butcher's business, €50,000 on a pig farmer, €75,000 to a supplier of feed and fuel, but in turn owes €100,000 to EFG Bank which itself has fractionally reserved claims on a pub owner and a prostitute who bought two homes on 105% LTV among many others.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, and asks for his €100 note back. The Greek innkeeper asks "what €100 note?" The German threatens to call the police. The innkeeper says "go ahead, ask for my brother who's a Lieutenant down at the precinct, he'll help you out." The German storms out back into the night, €100 poorer. No one produced anything. No one earned anything. However, the whole village is still buried in debt and looking to the future with a lot more optimism at the thought that maybe the Germans really are that gullible.
I think with Cyprus the Germans have shown, no, they're not that gullible.
Anyhow, I had a minute so I thought I'd pop in, but, I'm still really too busy at this time.... :S
Maybe in a few months I'll post a bit more.
04-05-13, 08:31 AM #16The Federal Reserve does purchase US Treasury obligations in the secondary markets. And if the Fed should purchase US Treasury notes, the US Treasury does not make interest payments to the Fed. It would be like writing yourself a check and depositing it back into your account. Now how much sense does that make?
When our Founding Fathers wrote the Constitution of the United States back in the 1700's, they specifically stated in Article 1 of this Constitution:
The Corrupt Federal Reserve Corporation. The Government will own nothing. The people will own nothing. The Bankers will own everything. By Melvin Sickler
If you would ask any American citizen what the Federal Reserve is, he probably would tell you that it is a government agency that creates all of the money to run the United States. This unfortunately, is the misconception most American have: that the Federal Reserve is a government agency, probably because the word "Federal" is used in its name. And this is exactly what the Bankers want: ignorance among the population!
Congress shall have the Power to Coin Money and Regulate the Value Thereof.
It was the wish of the Founding Fathers that the power to create and control the money be in the hands of the Federal Congress, and not in the hands of private Bankers who could charge enormous amounts of interest, and who could actually then control the country by controlling the money. They understood the tricks of the Bankers, for what did Mayer Anselm Rothschild, the great European Banker, once say: "Permit me to ussue and control the money of a nation, and I care not who makes its laws..." It was their belief that all citizens should share in the profits of its creation, not just private Bankers, and therefore the national Government must be the only creator of money.
So what happened! For several years after the Constitution was signed, the money in the country was handled both legally and illegally, the Bankers having devised all kinds of tricks to try to take control of the nation's money.
By now you must surely agree that the only real solution to solve our financial problems is to put pressure on the Government to repeal the Federal Reserve Act of 1913 and to demand that Congress again be allowed to create and control the money of the nation, issuing interest and debt-free "United States Notes" as the legal currency. John F. Kennedy had begun to do this very thing just before he was assassinated!
With a reform in the money system, no private Bankers would be able to rob the people. Government banks, under the control of the people's representatives, would issue and control all money and credit. A $60,000 loan made a build a house would require only $60,000 in repayment (with a little service fee), not $255,931.00 as it is now. Everyone who supplied materials and labor to build the house would get paid just as they are today, but the Bankers would not get $195,931.00 in usury.
A debt-free America would mean that mothers would not have to work but could remain home with their children. Juvenile delinquency would decrease rapidly. The elimination of the usury and debt would be the equivalent of a 50% rise in the purchasing power of every worker. The Bankers would no longer be able to steal billions of dollars from the people every year in interest. America would become the envy of the world, being prosperous and powerful beyond the wildest dreams of its citizens.
04-05-13, 08:51 AM #17
04-05-13, 09:14 AM #18
04-05-13, 10:00 AM #19
04-05-13, 12:24 PM #20
Congress created the Federal Reserve System with the Federal Reserve Act of 1913.
Since the adoption of the Federal Reserve and Keynesian economic policies our periods of recession have been fewer and shorter; periods of prosperity have been longer and stronger and inflation have been less severe. That is the record. That is the history that has been repeatedly proven to you and repeatedly ignored by you and those like you.
And where is your rationale and proof for these ludicrous claims? You have none, because they only exist in your mind and the minds of those like you. They are as real as all the other lizard man conspiracies.
The core of your belief is that the Federal Reserve is a private corporation owned by banks. And that core belief is not rooted in fact. You even referenced the Federal Reserve Act which created the Federal Reserve.
As previously pointed out to you profits from the Federal Reserve are returned to the US Treasury each year. So if the Federal Reserve is the corrupt lizard man organization owned by bankers, why does it transfer its profits to the US Treasury every year? You cannot answer this or any of the many other questions that have been put to you, because the answers do not comport with your beliefs.
Last edited by joepistole; 04-05-13 at 02:25 PM.
By Captain Kremmen in forum Business & EconomicsLast Post: 03-27-13, 04:34 PMReplies: 57