 |
| Author | Post |
|---|
Big_Mike
Member
|
Posted: Sun Aug 30th, 2009 01:28 am |
|
Ok, here's my beef.
The system of money we have now is flawed. Banks create money out of thin air every time they make a loan, transforming debt into money, and the system is only sustainable with a constantly exponential growth in the production of an economy as a whole.
It is clear that the Federal Reserve, and the world's other central banks, are in the process of collecting all the money, and eventually, all the world's real property as well.
What are our alternatives?
Well, we know that the world is not going to return to the gold/silver backed currency. The economy is hamstrung by the limitation of the amount of gold and silver in existence, it's easy to corner the market, and there are numerous ways to defraud the currency and the rest of society. So scratch that idea. Gold and silver are only viable for the individual, not society as a whole.
I am not a fan of nationalization of the banks. While it makes good sense to place the government in control of the money supply, removing the burden of debt that taxpayers slave away to pay to the bankers for the use of their own money, I do not trust politicians to act responsibly either. The temptation of unlimited money will cause any politician to go nuts, of this I am reasonably certain.
So what kind of system can be developed that will remove the temptation of power caused by obtaining control over the money supply?
|
Big_Mike
Member
|
Posted: Mon Aug 31st, 2009 02:54 am |
|
Hmmm...
I was kind of hoping someone else would have a suggestion I could begin researching.
Let me throw out a thought. Maybe good, maybe bad, I don't know.
The problem, as I see it, is that money is a representation of the only thing that really has any value whatsoever: time.
All things are created by the labors of the working class. They must sacrifice something for every car that goes down the road, every home that is built, every dishwasher that runs at night, and every plate of noodles that we wolf down for dinner. The things they sacrifice are 1) physical comfort, 2) freedom, and most importantly 3) time.
1) physical comfort - if it were fun, we wouldn't call it work, and we'd have to pay to do it.
2) freedom - when you clock in, your freedoms clock out and the boss becomes your master. This only applies to someone who works for someone else.
3) time - The real kicker, for a worker.
See, time is something you can't get back. Muscles will stop aching, and once you clock out, your boss's dictates don't really mean all that much to you. No, the valuable commodity you exchange for a paycheck is the amount of your life you spend at work. And your amount of time is finite, and cannot be renewed.
So the real value of money should be based upon the scarcity of time to the worker. This is, in my opinion, the reason we've never found any form of universal money, for nothing can buy you more time, hence, nothing is as valuable as time. We use goods to represent value, but the value we most want captured, the amount of our finite lives spent at work, is incapable of being represented by something material.
Gold, silver, bank notes, none of these things are as valuable to us as our very lives. Rich men through out time have wished to give up their fortunes for just a little more time.
So how do we go about creating a physical representation of a theoretical construct? I argue that we don't.
What I think I like most is the idea that we begin issuing credits for numbers of hours worked. "Digital dollars" is another concept that comes close to what I am thinking about.
A system of payments and repayments based not up a fluctuating cost of a good or service, but on a standard measure of time. Think of it like an automotive shop's use of a "Suggested Repair Time" manual to determine charges for customers, but not so specific.
If you show up for work, you get 8 credits for 8 hours. Or make it a scaled system, where a high school graduate earns 1 credit per hour, a college graduate earns 1.5 credits per hour worked, so on and so forth. The scale could be based on anything, not merely education level as well.
Thoughts?
Because my other idea requires us calculating the total amount of time required for us to produce a good, then the amount of time saved through the division of labor, and placing costs somewhere between the two, but I don't know that such a thing is possible...
|
crookster_man
Member
| Joined: | Wed Jan 25th, 2006 |
| Location: | Liberty |
| Posts: | 3415 |
| Status: |
Offline
|
|
Posted: Mon Aug 31st, 2009 04:25 am |
|
First off, very interesting topic. I have spent many nights thinking about this one. I am deeply disturbed by the way our modern monetary system functions. There are a few reasons why our fiat system has gone completely nuts.
But before I get to that I want to comment on two of your solutions (which by the way I feel is the most important thing to focus on now - solutions). First the digital dollar, I like that idea and it will help mesh with what I will say later, so I will come back to that. The second idea was of offering a credit based system. This to does focus in on the root problem, the disconnect between fiat value and real world value. However, as a free market advocate you would probably agree that the market should worker compensation. 1 credit per degree or hour worked is far to ridged in our complex economy.
Now back to the insanity of the fiat monetary system we have today. Here is something I want you to think about. The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008 Link. This is the value of the entire world’s stock in all governments, companies, trusts and resources.
Now, look at this…According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion Link. To put that into perspective, in one year that amount of dollar volume on the foreign exchange markets is over 25 times the size of the entire world stock market.
Super massive transnational banking enterprises are moving such volumes of money in the 100s of trillions of dollars, no wonder the fiat currency as become disconnected from REAL VALUE.
This Mike is the dilemma we face. Left to their own devices the institutions that were created to protect our wealth have created a high stakes gambling system where real value (connected to time, labour, and resources) is almost nonexistent! No wonder we have such wild swings in the “business cycle” which is nothing more than the over inflated house of financial cards collapsing. Of course, when the dust clears the real world assets are still owned by somebody… just not the average person, anymore.
Solutions? Well to be honest the people who benefit from this system will not allow it to end out of the goodness of their hearts. I really don’t see a shift away from our “modern” monetary system without some sort of massive social and financial upheaval. However, when the foundation is set for a change I suspect the correct course of action would be a credit or “digital dollar” system that directly ties the VALUE of currency to the (time, labour, resources) of the REAL economy.
Basically a digital gold standard. It would also require the re-writing of the loan system since P = P+I is impossible to sustain in a finite economy which the Real economy is. In this scenario, “loans” could only ever be an investment. If the investment results in a return the “lender” makes a profit. If the “loaned” money fails to result in a return the lender loses money. (Basically turns the world’s lending economy into a stock market). No actual interest can be charged on the loan for this system to work.
It’s the only way for it to be sustainable. Interest was once a crime in our society; it was a wisdom we have lost. We must make it a crime to charge interest or we will never escape this financial serfdom we have created for ourselves.
|
Big_Mike
Member
|
Posted: Mon Aug 31st, 2009 12:32 pm |
|
See, my biggest problem with the stock market is that I see it as a method of fleecing the average citizen. The big boys (i.e. the mega banks) sucker people into believing that you can only grow wealth through risk, but when the stock market crashes, they aren't the ones who hit the poor house (they don't assume the risk they force on us).
The stock market is the ultimate gambling hall. A monetary game of craps, if you will, where the house is controlled by the powers that be, and even though they let us throw the dice, we never get the winnings. We must roll our winnings back into the next toss, and when we lose, the banks get everything.
So I'm forced to believe that we don't want a monetary system that resembles the stock market in any way.
And as to the idea of a digital dollar set up being somewhat rigid? Well, the value of time is fairly rigid as well. An hour of your life has the exact same value as the hour of the life of your co-worker, no matter how productive you both are with it, because the value is dependent upon the person who is working. By introducing a variable worth system, we introduce the same problems that we see with physical money: Some credits won't actually be worth what they represent, we will lose time-value, the same as gold doesn't reimburse us adequately for our time spent at labor.
|
Big_Mike
Member
|
Posted: Thu Sep 3rd, 2009 03:20 am |
|
crookster_man wrote: Basically a digital gold standard. It would also require the re-writing of the loan system since P = P+I is impossible to sustain in a finite economy which the Real economy is. In this scenario, “loans” could only ever be an investment. If the investment results in a return the “lender” makes a profit. If the “loaned” money fails to result in a return the lender loses money. (Basically turns the world’s lending economy into a stock market). No actual interest can be charged on the loan for this system to work.
I'm just being kind of nit picky here, cm.
When you sign for a loan or mortgage, you're offering up the object you are about to purchase as collateral.
The bank doesn't "lose money", they get the property! That was the rub with the housing market meltdown. The banks are getting stuck with a loss on the repossessed the homes unless home prices skyrocket and they're able to offload their newfound surpluses for an inflated value similar to the principle amount in the loan.
That's the reason they have tried to "reinflate" the housing bubble. So the banks can clear their books with minimal loses. Because this sort of situation, getting caught with the losing hand, usually doesn't happen to the bank...
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Mon Sep 14th, 2009 08:41 pm |
|
Is it the issuance of credit you're worried about, or money printing?
|
Big_Mike
Member
|
Posted: Tue Sep 15th, 2009 12:27 pm |
|
Eyeless wrote: Is it the issuance of credit you're worried about, or money printing?
The issuance of credit. They can't print money fast enough to keep up with the growth in bank credit.
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Tue Sep 15th, 2009 08:44 pm |
|
Big_Mike wrote: Eyeless wrote: Is it the issuance of credit you're worried about, or money printing?
The issuance of credit. They can't print money fast enough to keep up with the growth in bank credit. As in loans? I'm pretty sure that the American central bank does that only in small doses.
|
Big_Mike
Member
|
Posted: Wed Sep 16th, 2009 12:48 am |
|
Eyeless wrote: Big_Mike wrote: Eyeless wrote: Is it the issuance of credit you're worried about, or money printing?
The issuance of credit. They can't print money fast enough to keep up with the growth in bank credit. As in loans? I'm pretty sure that the American central bank does that only in small doses.
Nope.
All banks are a circular loop. They're all part of the same system. In the overall scheme of things, there is no difference between taking out a loan in one bank, or in another.
95% of US currency is just a number in a spreadsheet. That's the entire reason we abandoned the gold standard in this country, precisely so that exact thing could occur.
|
Calgary Libertarian
Member
|
Posted: Wed Sep 16th, 2009 08:11 pm |
|
An interesting read from Jim Rogers...
http://www.bi-me.com/main.php?id=40249&t=1&c=62&cg=4&mset
Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said the Fed and the US Treasury should have let 10 banks fail, not just Lehman Brothers, for the financial system to clean itself up.
Speaking to CNBC Wordwide Exchange today Rogers said "All the government officials and bureaucrats loved the fact Lehman failed, because they could all jump in and support banks."
"This whole problem was not caused by Lehman Brothers or Lehman Brothers failure. Lehman was an effect not a cause."
"The real problem over the past 10-15 years has been that regulators have not let people fail. Had they let people fail we would have solved this problem a long time ago. I don't know why they're not in jail," Rogers said.
|
Big_Mike
Member
|
Posted: Thu Sep 17th, 2009 03:05 am |
|
Calgary Libertarian wrote: An interesting read from Jim Rogers...
http://www.bi-me.com/main.php?id=40249&t=1&c=62&cg=4&mset
Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said the Fed and the US Treasury should have let 10 banks fail, not just Lehman Brothers, for the financial system to clean itself up.
Speaking to CNBC Wordwide Exchange today Rogers said "All the government officials and bureaucrats loved the fact Lehman failed, because they could all jump in and support banks."
"This whole problem was not caused by Lehman Brothers or Lehman Brothers failure. Lehman was an effect not a cause."
"The real problem over the past 10-15 years has been that regulators have not let people fail. Had they let people fail we would have solved this problem a long time ago. I don't know why they're not in jail," Rogers said.
The likely answer?
Goldman Sachs owns the Federal Government.
The Fed owns Goldman Sachs and the Federal Government.
The Fed has decided that they don't need to be put in jail.
It's good to be the king.
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Thu Sep 17th, 2009 08:26 pm |
|
Big_Mike wrote: Eyeless wrote: Big_Mike wrote: Eyeless wrote: Is it the issuance of credit you're worried about, or money printing?
The issuance of credit. They can't print money fast enough to keep up with the growth in bank credit. As in loans? I'm pretty sure that the American central bank does that only in small doses.
Nope.
All banks are a circular loop. They're all part of the same system. In the overall scheme of things, there is no difference between taking out a loan in one bank, or in another.
95% of US currency is just a number in a spreadsheet. That's the entire reason we abandoned the gold standard in this country, precisely so that exact thing could occur.
I know that. But the Central Bank mostly gives out loans to make up for inadequate reserves, not to supplement any banks investment portfolio. So I think the majority of what the Fed is up to is related to buying and selling bonds or securities or what have you.
|
Big_Mike
Member
|
Posted: Thu Sep 17th, 2009 09:16 pm |
|
Eyeless wrote: Big_Mike wrote: Eyeless wrote: Big_Mike wrote: Eyeless wrote: Is it the issuance of credit you're worried about, or money printing?
The issuance of credit. They can't print money fast enough to keep up with the growth in bank credit. As in loans? I'm pretty sure that the American central bank does that only in small doses.
Nope.
All banks are a circular loop. They're all part of the same system. In the overall scheme of things, there is no difference between taking out a loan in one bank, or in another.
95% of US currency is just a number in a spreadsheet. That's the entire reason we abandoned the gold standard in this country, precisely so that exact thing could occur.
I know that. But the Central Bank mostly gives out loans to make up for inadequate reserves, not to supplement any banks investment portfolio. So I think the majority of what the Fed is up to is related to buying and selling bonds or securities or what have you.
Setting interest rates is a pretty powerful tool in the box as well.
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Thu Sep 17th, 2009 09:21 pm |
|
Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Thu Sep 17th, 2009 09:26 pm |
|
A point of interest Mr. Mike; are you a Monetarist?
|
Big_Mike
Member
|
Posted: Fri Sep 18th, 2009 01:53 am |
|
Eyeless wrote: Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
What?
Ever hear of the Wiemar Republic?
Russia?
Zimbabwe?
Argentina?
Don't you think that interest rates have an effect on the value of the dollar? (Yes).
Do you know what percentage of our tax dollars are used to pay off the interest on the National Debt? Don't you think we could use that money elsewhere?
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Fri Sep 18th, 2009 02:05 am |
|
Big_Mike wrote: Eyeless wrote: Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
What?
Ever hear of the Wiemar Republic?
Russia?
Zimbabwe?
Argentina?
Don't you think that interest rates have an effect on the value of the dollar? (Yes).
Do you know what percentage of our tax dollars are used to pay off the interest on the National Debt? Don't you think we could use that money elsewhere?
Germany, Zimbabwe, Argentina and Russia were controlled by bankers? We're talking about despotism not inflation right, or are you trying to make a connection?
|
Big_Mike
Member
|
Posted: Fri Sep 18th, 2009 03:25 am |
|
Eyeless wrote: Big_Mike wrote: Eyeless wrote: Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
What?
Ever hear of the Wiemar Republic?
Russia?
Zimbabwe?
Argentina?
Don't you think that interest rates have an effect on the value of the dollar? (Yes).
Do you know what percentage of our tax dollars are used to pay off the interest on the National Debt? Don't you think we could use that money elsewhere?
Germany, Zimbabwe, Argentina and Russia were controlled by bankers? We're talking about despotism not inflation right, or are you trying to make a connection?
No, we're not talking about despotism, unless you think the Fed is setting up the NWO as we speak.
I'm talking about the power of the bank being unmatched because they control the currency. They print it. They charge us interest to use our own money. They can apparently take trillions right from the Treasury and not tell us what they did with it. How much more power can an organization have?
Just took $2 Trillion from the Treasury, and won't tell us what they did with it. The audacity! Check it out, if you had missed it. HERE.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
--- Thomas Jefferson
The bank's ability to regulate currency, combined with their control of the interest rates, combine in a fiat money system. They inflate the amount of currency (95% of our currency isn't "real", but simply a sum of money waiting to be collected) beyond the speed of the economy to keep up (there isn't enough money to pay off all that debt). Then, once they have all that loot, they deflate prices to maximize the wealth they just accumulated, make it last longer, make it more powerful.
But it's irrelevant at that point. The massive defaulting of the population will have the effect of rendering unto the bank virtually all personal property.
|
Eyeless
Member
| Joined: | Mon Jul 27th, 2009 |
| Location: | Ontario Canada |
| Posts: | 293 |
| Status: |
Offline
|
|
Posted: Sat Sep 19th, 2009 06:13 pm |
|
Big_Mike wrote: Eyeless wrote: Big_Mike wrote: Eyeless wrote: Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
What?
Ever hear of the Wiemar Republic?
Russia?
Zimbabwe?
Argentina?
Don't you think that interest rates have an effect on the value of the dollar? (Yes).
Do you know what percentage of our tax dollars are used to pay off the interest on the National Debt? Don't you think we could use that money elsewhere?
Germany, Zimbabwe, Argentina and Russia were controlled by bankers? We're talking about despotism not inflation right, or are you trying to make a connection?
No, we're not talking about despotism, unless you think the Fed is setting up the NWO as we speak.
I'm talking about the power of the bank being unmatched because they control the currency. They print it. They charge us interest to use our own money. They can apparently take trillions right from the Treasury and not tell us what they did with it. How much more power can an organization have?
Just took $2 Trillion from the Treasury, and won't tell us what they did with it. The audacity! Check it out, if you had missed it. HERE.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
--- Thomas Jefferson
The bank's ability to regulate currency, combined with their control of the interest rates, combine in a fiat money system. They inflate the amount of currency (95% of our currency isn't "real", but simply a sum of money waiting to be collected) beyond the speed of the economy to keep up (there isn't enough money to pay off all that debt). Then, once they have all that loot, they deflate prices to maximize the wealth they just accumulated, make it last longer, make it more powerful.
But it's irrelevant at that point. The massive defaulting of the population will have the effect of rendering unto the bank virtually all personal property. I thought that the Fed only printed money when the commercial banks fell short of hard currency, and charged it against the commercial banks credit, to prevent runs. And wouldn't it be a good thing for the bank to deflate the dollar if prices are high, by accumulating money, which, essentially ceases to exist while it sits in the Feds vaults waiting for a demand gap.
|
Big_Mike
Member
|
Posted: Sun Sep 20th, 2009 05:51 am |
|
Eyeless wrote: Big_Mike wrote: Eyeless wrote: Big_Mike wrote: Eyeless wrote: Indeed it is. I'd probably be a really bad corrupt banker because I can't think of a way to control the government by adjusting interest rates. That's probably not a bad thing...
What?
Ever hear of the Wiemar Republic?
Russia?
Zimbabwe?
Argentina?
Don't you think that interest rates have an effect on the value of the dollar? (Yes).
Do you know what percentage of our tax dollars are used to pay off the interest on the National Debt? Don't you think we could use that money elsewhere?
Germany, Zimbabwe, Argentina and Russia were controlled by bankers? We're talking about despotism not inflation right, or are you trying to make a connection?
No, we're not talking about despotism, unless you think the Fed is setting up the NWO as we speak.
I'm talking about the power of the bank being unmatched because they control the currency. They print it. They charge us interest to use our own money. They can apparently take trillions right from the Treasury and not tell us what they did with it. How much more power can an organization have?
Just took $2 Trillion from the Treasury, and won't tell us what they did with it. The audacity! Check it out, if you had missed it. HERE.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
--- Thomas Jefferson
The bank's ability to regulate currency, combined with their control of the interest rates, combine in a fiat money system. They inflate the amount of currency (95% of our currency isn't "real", but simply a sum of money waiting to be collected) beyond the speed of the economy to keep up (there isn't enough money to pay off all that debt). Then, once they have all that loot, they deflate prices to maximize the wealth they just accumulated, make it last longer, make it more powerful.
But it's irrelevant at that point. The massive defaulting of the population will have the effect of rendering unto the bank virtually all personal property. I thought that the Fed only printed money when the commercial banks fell short of hard currency, and charged it against the commercial banks credit, to prevent runs. And wouldn't it be a good thing for the bank to deflate the dollar if prices are high, by accumulating money, which, essentially ceases to exist while it sits in the Feds vaults waiting for a demand gap.
Ahhh... It took me a couple of minutes, but I see where the problem is.
The phrase "They print it." isn't really correct, and hasn't been for some time. You are correct that they only print money when the banks need it on hand.
They create the majority of our currency by pulling it out of their rectums, though. 95% to date has been created this way.
Every time you take out a loan, they create the amount of money equal to the principle on your loan and it gets injected into the total pool of "money".
They don't actually print it, they use a spreadsheet to magically create it out of nothing.
Last edited on Sun Sep 20th, 2009 05:53 am by Big_Mike
|
Current time is 09:45 am | Page: 1 2   |
|
|
|
|
