CheckEmoji Community · the emoji forum
🏠 Home 🆕 What's new ❓ Unanswered 🔥 Popular 📡 RSS Members 👥 0 online
log in · register
Home › Maria Thomas48 › Posts

Posts by Maria Thomas48

334 posts shown.

The Financial System and Money Supply in Banking, Insurance & Loans ·
Gregory Williams7 said:A fundamental amateur error is mistaking consequences for causes.
Inflation is already embedded in the system the moment your non-credit money enters circulation. No wage increase is required to trigger it. You could theoretically freeze wages at baseline levels if you wished. What would follow? Hunger, poverty, and inevitable civil unrest. People would drag you into the streets, douse you in gasoline, and set you ablaze. But at least you would have your precious system.

Higher wages didn't cause inflation; freshly printed money did. This isn't just economic theory; it is basic common sense.

However, when you lack any actual proof, we must simply point out the fact that this "credit-based" system has functioned for nearly 70 years, right? Does anyone have an explanation for why, when all your models predict a total collapse within a few decades, the system persists?

Furthermore, your curve is negatively exponential. It only trends downward. This implies there is no "recovery" from this crisis. If we do not start handing out cash indiscriminately, we are heading toward absolute catastrophe—economic, political, social, and total. A disaster so profound that one might as well stock up on food and hide in a bunker. Is that your prediction?

So, if global economic growth actually resumes in two or three years, does your entire theory finally and permanently collapse?

I strongly suggest reading some foundational literature on inflation. Someone once shared a link regarding the history of inflation. It was excellent material; I regret not having it handy now.

In short, it demonstrated how people have spent centuries—ever since money was invented—trying to find prosperity through printing currency. And how it always ends.
The logical conclusion remains: we must strengthen the economy and boost production first. Only then should the economy follow suit. We must increase wages without printing new money. Only then will we see a true rise in the standard of living we all desire.

But naturally, you will continue to insist on your own way.

That’s just a bunch of wishes with zero chance of long-term success. That's basically the whole Government platform. Just a wishlist.

You can't actually hike wages and production without an influx of capital. Credit expansion is nothing more than a carrot on a stick for a donkey. It's just there to exploit them. The donkey never actually gets the carrot.

Besides, why even bother raising wages? Especially when it's obvious that money isn't being printed out of thin air, it's just being issued as credit. And credit always brings a deficit along with it.

For instance, we know credit expansion triggers inflation and debt slavery. Our beloved economists tell us we need GDP growth to pay off national debts. But they conveniently forget to mention that to get that kind of GDP growth, we have to take on even more debt than what we're trying to pay back. Just another gem from economics as a "science." Economic progress, in a nutshell, doesn't exist. You can't pay back what was invested (unless you're exporting to other countries). Long live ignorance.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Matthew Patel12 said:Maria Thomas48, I find myself repeating this point indefinitely, yet it seems to fall on deaf ears.
The precise volume of non-credit money is always determined by a specific formula:
dM = kM ; k = (supply - demand)/demand ;
For instance, if supply equals 110 and demand equals 100.
k = (110 - 100)/100 = 10/100 = 1/10 = 0.1 = 10%.
If you issue 10% non-credit money, 5% will be directed toward boosting production, while the remaining 5% compensates for the deceleration in the velocity of money. Every single unit produced will be sold, including any unsold inventory that lingered simply because the circulation of money slowed down. This entire process occurs with prices remaining perfectly stable. In other words, there is no inflation.

Now, look, Mr. Patel, formulas are one thing, but reality is quite another. In that scenario, 5% of the money went into savings. But savings isn't just an end goal; it should really be a temporary way to accumulate capital. Once you successfully sell everything you produce—and we aren't talking about producing more than what people actually need—it makes sense that an entrepreneur eventually wants to put those earnings back into an investment. Generally speaking, all the extra money added to the system eventually ends up as someone's profit. That money can then kickstart production and provide jobs for the unemployed. Eventually, after some time passes, we reach a point of ideal employment, high production levels, and consequently, a high demand for non-credit money to realize those monetary profits. At the same time, GDP growth generates great revenue for the Government, and I think you know what happens next. Public sector unions start demanding higher wages. Politicians—whoever they may be—and their economic advisors don't have a clue about the actual situation on the ground. They see the GDP climbing and assume it’ll just keep going like that forever, so they start planning bigger spending. That’s the core of it. Ignorance and a lack of understanding. Instead of saving the surplus tax revenue, they're already setting the table for a feast they haven't even earned yet. Any wage hike leads straight to inflation. We know why. Payroll taxes automatically increase as well (that's just how the law works), and that triggers inflation. Higher tax burdens lead to rising prices. This bloats the GDP value and increases the amount of non-credit money that needs to be issued.

My take is that real GDP growth can go higher until we hit full employment (natural unemployment levels) and satisfy everyone's needs within the community's means. After that, GDP growth might only come from export sectors—where you don't need to generate non-credit money—or from population growth. Another possibility is technological progress improving productivity, which could theoretically raise wages without causing inflation (since you need fewer workers in production). But honestly, expecting that to happen across every single industry at once is a stretch.

The whole mess comes down to the economic ignorance that keeps us stuck in the hole we're currently in. And if we don't start treating economics as a serious science, we're just going to dig ourselves into a new hole (maybe a slightly shallower one).

Best,
sites.google.com/site/financijskisustav/home
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:I am scaring no one... I am simply using pure mathematics, just like you... besides, take a look at the link below...

http://img686.imageshack.us/img686/6...itnisustav.jpg

The simulation assumes annual savings of 15% of GDP... we have already calculated this in previous posts since there is no credit in this system and everyone must save... the simulation uses a 3% annual GDP growth rate... we also considered the GDP increase if only 10% of those savings were reintroduced into circulation and what the resulting GDP would be... in that scenario, dividing that 10% of GDP by the standard GDP (which wouldn't account for the return of savings to circulation) gives us the inflation risk...

One solution to make this system work without inflation would be to establish a call center... when someone wants to spend part of their savings to buy a television, they would need to call that center so the government can pull that specific amount of money out of circulation at that moment... that way, his purchase of a television won't trigger inflation... 😂

I think this long-term GDP growth thing is going to be more problematic than people realize. If you’re looking at a steady 3% annual growth rate, that basically means the economy doubles every 23 years, or triples itself every 46 years. I don't know the exact math on all the fallout, but it's bound to trigger some strange consequences. Either everything just gets more expensive, or people actually have to work harder. Personally, I think the price hikes are more likely. Think about it. A cashier at a local grocery store or a bakery isn't suddenly going to scan items twice as fast. Are tractors going to plow fields twice as quickly? Are professors going to lecture at double speed? Even looking at commercials, there’s only so much room for "increased efficiency" before you hit a wall. It can't just go on forever.

I also think that actual growth only really makes sense if it serves a purpose, like meeting people's needs or actually getting the unemployed back to work. Because of all this robotics stuff, we’re going to be able to produce way more than before. So, honestly, I find it hard to believe that real GDP can just keep climbing forever. At the very least, whatever growth we do see has to be more than just a result of the population increasing.

Let’s say we hit a point where GDP stops growing at its current pace. Even then, we’re still stuck dealing with the fundamental issues of how capitalism handles wealth accumulation. It's pretty obvious that if you don't keep increasing the amount of money circulating in the system, the whole capitalist structure starts to fracture. The logic usually follows a certain life cycle: while you're in your active working years, it makes sense to pour money into a retirement fund, and then you tap into those resources once you retire. In a perfect world, that kind of long-term saving just balances out later through consumption. But here's the catch—if people actually can't manage to save for their old age, like what we're seeing right now, the whole thing breaks down.

Maybe we need more non-credit money right now, but that doesn't mean we'll always need it. If we look at pension funds—which charge like a 2% annual management fee on total fund value, which is insane—and we start funding retirees through non-credit means instead, it creates this weird paradox. A larger number of retirees would actually lead to higher earnings for everyone still in the workforce. And obviously, the working population would have to be able to provide for everyone and meet all those needs too.

Any time GDP climbs—or more accurately, when we see more people getting hired and higher earnings per worker—prices tend to follow suit. It’s pretty hard to find an exception to that rule. Extra non-credit money usually fuels that GDP growth. But once we hit that sweet spot of full employment, things get tricky. You end up with too much cash chasing too few workers, which triggers inflation. Think about wages spiking because there just aren't enough skilled hands to go around. Plus, when everyone is working, you get this surplus of savings, but those funds can't really be reinvested into hiring more people since everyone is already employed.

Is the answer found in manufacturing and buying luxury goods? Or maybe just saving cash. Maybe investing in development institutions. Buying stocks. Putting money into new energy sources or focusing on energy efficiency. I don't really know. There is plenty of space and enough money out there to invest, but does that automatically trigger inflation? Not necessarily. The Government can step in with regulations to manage it.

It seems pretty clear from what's being written that there's a high chance non-credit money actually drives employment and general prosperity, rather than just people collecting checks without working. Right now, the system we have just uses this as a carrot on a stick—it's like a donkey chasing something it can never quite reach, while the boss just exploits the whole situation for his own gain.

It’s honestly tough to pin down the exact amount of non-credit money flowing through the system during a transition period. The problem is how we measure production against the GDP. I’ve mentioned this before, but you can legally inflate the GDP quite easily if you want to. Here are some pretty silly examples. If you have a complex corporation with multiple stages of manufacturing and you split up those production units, you end up with double or triple counting the GDP. Internal transfers just pump up the numbers for no reason. Even circular sales—selling the same goods back and forth—can artificially skyrocket the GDP, even though the actual trade result is zero. Every extra hand involved in moving a product adds to the GDP. And so on.
On top of that, we’re dealing with an insane level of interest rate burdens on loans, which means we really need to take some radical action there.

The bottom line is that the current system is a direct path toward endless debt, unemployment, poverty, and total destitution, all built on a foundation of fraudulent laws.

Non-credit money that is issued backed by labor invested in newly created value definitely won't lead to scarcity or poverty. You can't have the issuance of non-credit money following a permanent exponential curve because that money has to be matched by an equal amount of labor coverage. It is physically impossible to continuously invest labor along an exponential flow curve forever.

The government has to ensure that money isn't being handed out without real backing from actual work. That means no bloated bureaucracies where one boss oversees three workers. No dream pensions. No corruption or the shifting of wealth into the hands of a tiny few (which usually happens under the guise of "consolidating procurement"). No social welfare without some kind of community service attached to it. No exploiting the working class until there's nothing left. Etc.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Ashley Barnes9 said:The current system is absolutely headed for disaster, and honestly, that goes for the architects who actually thought they could pull off this level of control. But let’s be real: any other system we tried to implement would eventually fall apart too. Human nature—driven by greed, power trips, and the urge to dominate others—is just too flawed for perfection. If anyone were going to find the loopholes and tear a system down, it would probably be us Americans...
😉

So, maybe what we're seeing right now is just a fair consequence for all of humanity. We keep chasing a seat at the table of the ultra-wealthy instead of building a society where everyone actually gets a fair shot.

I feel like this is such a typical American approach to solving problems. We run into a mess, we know exactly why it happened, and then—get this—we decide we deserve it. It's like we actively wish for things to go wrong. We should be aiming for better. I don't know about you guys, but I don't have any desire to become obscenely rich. Once your needs are met, having more wealth doesn't really matter much.

I'd tell crimsonfalcon10 to stop scaring people with talk of hyperinflation. That kind of logic is like arguing we should stop using fire because of forest fires, or stop taking medicine because of overdoses. It’s silly. When money is printed in ways nobody truly understands, anything can happen.

And how can economic science even function without addressing the calculation of non-credit money issuance? I've brought this up before, but it seems like everyone just ignores it. To me, that omission casts a massive shadow over what we call "economics" as a science today.

Best,

sites.google.com/site/financijskisustav/home
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Matthew Patel12 said:Maria Thomas48, my initial proposition was quite simple: we should utilize non-credit money to fund pensions and child allowances. This approach has nothing to do with the labor force, it doesn't disincentivize work, and it carries no actual cost. When prices stabilize and profits rise, production and employment naturally follow suit. In the US, Congressman Dennis Kucinich has proposed funding infrastructure, education, healthcare, and pensions through similar means. Now, those pension models have been replaced by a citizen's dividend—formerly known as a national dividend—which is distributed to all residents of the USA. It is patently obvious that Kucinich is an American at heart. You can find more details on this at http://monetary.org

Funding infrastructure sounds fine, assuming there isn't some construction mafia running the show. Usually, these big projects are just expensive ways for certain people to get rich. I think you need massive oversight, or maybe just set up state-run firms to handle the planning and the actual building work.

Everything else seems pretty predictable. The only real issue is that medical technology keeps advancing and getting more expensive by the second. If you're funding all of that with non-credit money, you're injecting a huge amount of new cash into the system, and that might kick off inflation.

Besides, Americans face a major hurdle when it comes to implementing non-credit money because so much is spent on the military. That means there's a huge segment of the population basically living off others without contributing directly. Plus, oil is traded in dollars, so trying to inject new dollars through non-credit methods is tough since the volume has to be so high. And don't even get me started on the space program and those star wars budgets.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:You don't even grasp what you're talking about... you can only withdraw money once it's already circulating... once it finds its way back to you... by the time that happens, inflation has already hit... you're just reacting too late to pull the cash out...

If corporate profits represent 5% of GDP, we are looking at $16.5 billion annually... since there are no credits in this system, every single employee has to save up to buy a house or an apartment... in the US, there are roughly 150 million workers and the average salary is $1667, making that $90 billion annually... if citizens used to use their paychecks for housing loans, now they'll have to save that exact amount instead... which means we're looking at an additional $30 billion in savings per year... and that doesn't even account for retirees... whose savings shouldn't be ignored either... which means $46.5 billion is being pulled out of circulation every year... essentially, you are injecting $46.5 billion into the system annually... if just 10 percent of those savings hits the market during Christmas in the first year, you'd trigger 10% inflation... by the second year, when savings reach $90 billion, 10% of that value would cause 20% inflation... after ten years, with savings totaling $450 billion and only needing $45 billion for circulation, if just 10% of that total flows into the economy, you're facing 100% inflation... not to mention how much crime would skyrocket in such a system... everyone knows people stash cash under the mattress... why work at all when you could just rob your neighbors?

🤣

We have to consider that most people used to finance housing through credit rather than saving. And credit goes straight into consumption (though cars are a bit different because they're imported, so part of that money leaks out to imports). Basically, we were spending things today that would have required savings to realize later (which is a questionable concept in a purely credit-based system). The difference is that by doing this now, you are effectively deploying resources from the future (future taxes, future wages for construction workers). But at the same time, it shows that production can happen in the present; it's just that the money needed to jumpstart it is missing . You could argue a general thesis that there's no sustainable economic growth without a reliable source of monetary profit. That matters when it comes to turning labor into savings
.
There are all sorts of economic theories about life cycles, and I won't try to lecture anyone on them. Generally, it's a productivity issue. Farmers and ranchers have to produce enough food for everyone. Everyone else has to produce goods for both the farmers and themselves. It's easy to figure out the maximum demand for certain goods based on how long they last. If production meets that demand, we have sufficient productivity. Then you look at engagement. Depending on productivity, we need a certain number of people. The question is whether we have enough people to meet current needs given existing productivity levels. If we do, then the only remaining factor is whether every worker sees enough incentive in their job to earn enough to cover the cost of living (per the Constitution) along with basic needs (housing, food, clothes, raising kids, school, transportation)
.
None of this works without sufficient productivity and quality. If a farmer only produces enough to feed two families, then at least half the population has to work in agriculture. If we produce 100 cars a year and they last 10 years, we only have 1,000 cars available. If cars lasted 100 years and we made a few more, maybe eventually we'd meet the demand for cars. Obviously, because of short-lived goods, we need higher wages (and needs are higher than they were 100 years ago), but it's clear that those wages just flow right back into the hands of the people mass-producing short-lived stuff (junk). So, the old saying holds true: I'm not rich enough to buy cheap (junk) goods
.
It's a bit off-topic, but to solve the housing problem, you need enough housing production, using as few people as possible, with houses that last a long time. The same applies to other long-term needs. Then you just replace things with new ones when they expire. You can't have everything be new construction and constant manufacturing. At that rate, you burn through too many resources. And there simply aren't enough people who can afford to buy new homes.

That’s why Matthew Patel12 hit the nail on the head when he pointed out how churning out cheap, low-quality junk just forces us to pump more and more new money into the system. If we keep moving at this exact pace, honestly, I don't see how humanity survives on this planet much longer.

It really feels like injecting non-credit money isn't nearly enough to fix things. But here's the catch—if that amount isn't sufficient, then the entire credit-based system is basically a dead end. There is no actual way to pay off those "debts" because, when you look at the math, the system doesn't generate profit; it just generates losses.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
I don't know. It’s just one of those things where you look at the data and the reality doesn't quite line up with what people say on the news. You see these trends moving in one direction, but then you talk to someone on the street in Chicago or even out in Phoenix, and the vibe is completely different. It’s strange. I think we tend to overcomplicate these systemic shifts. People want a grand theory, a single reason why everything feels a bit off lately, but sometimes it’s just a series of small, disconnected events that happen to cluster together. It’s not always a conspiracy or a massive planned shift. Sometimes it’s just messy. That’s my take anyway. Just an observation. says:
Maria Thomas48

Take a look at this table...

I was looking through this data from the Federal Reserve regarding the historical H.6 release. It’s pretty dense stuff. Just raw numbers on the components of the monetary base. You look at these trends over the long haul and it really changes how you view liquidity in the American economy. Most people just glance at the headlines, but if you actually sit down with the historical files, you see the shifts in how money moves through the system. It's all there in the spreadsheets. Very straightforward once you get past the formatting. Makes you think about the sheer scale of the adjustments they've had to make over the decades to keep things steady. It's interesting. Truly.

The way M1 money supply has climbed over the years... if you look at it through Matthew Patel12’s logic, you have to take the current M1 and add it to the number of years the system has been running, multiplied by that initial M1. It’s a specific way of looking at it. And now we’re hitting a wall because M1 is already ten times smaller than the GDP. It’s a bit of a mess. Just imagine what happens when we actually hit the point where M1 is ten times larger than the GDP based on his principle. That would be something else entirely.

All I could really wrap my head around was that M1 money supply has been climbing by about 3.68% annually over the last 19 years. It’s an interesting trend. If we actually knew what the average annual inflation rate was, we could finally see how much the real value of that M1 supply is actually growing. Or shrinking. It's hard to say without both numbers side by side.

I’ve said this before, but banks are basically just using secondary offerings to multiply deposits. They take those deposits and then use the cash flow to demand massive returns. It also helps juice up the GDP numbers on paper, but it doesn't actually do anything to help people pay off the debt from those loans. It's all circular.

I’ve already said this before: I don't do economic analysis. You need actual, boots-on-the-ground knowledge about how specific economies actually function to pull that off. That’s just not my thing. An analysis by itself isn't enough to provide a solution; it really just points out the problems that follow.

Even if I sat down and put together a massive, deep-dive analysis with a perfectly accurate solution, it wouldn't matter an ounce. It’s all for nothing when there isn't any public awareness about the mess we're actually in. People don't realize that the only real way out is through changing how money regulation works. Tesla had this vision for a superior technological fix—which, honestly, might actually be safe today given how much people worry about things like electromagnetic wave exposure—but it just didn't matter because nobody saw the need for it. There was no collective consciousness. No one was looking for it.

Alright. I’ve put together a completely accurate analysis of how the credit system alone impacts the economy and where exactly the breakdown is happening. It probably won't spark some massive revolution in thinking, though. In my view, I’ve done more than enough to get things moving in the right direction. I’ve said this before, but once we prove the current system is broken, the actual planning for changes needs to be handed over to economists—real intellectuals and patriots who actually have the technical expertise to handle it.

Why should I be expected to have all the answers? Even Leonardo da Vinci didn't have them, yet he still went ahead and imagined the possibility of building an aircraft. It's all the same.

If you want a rough estimate for how much non-credit capital we might need, you could look at it this way. Take the average salary and multiply it by twelve months, then multiply that by the total number of workers. From there, factor in the ratio of total GDP to final consumption. If you run those numbers, you end up looking at roughly $650 billion. That’s about... $1072 Non-credit money per worker annually. If you calculated that based on every single resident, we’re looking at about $12.8 billion. With that much savings per worker, it's pretty obvious people don't have the means to go out and buy cars. I mean, if every third person actually bought a vehicle, their future expenses would skyrocket, leaving them with zero savings for the essentials—housing, furniture, putting kids through college, and all that. In this kind of scenario, it would help if all pensions were financed using non-credit money—assuming, of course, that money is earned through actual merit and not just through who you know—but even then, it doesn't feel like enough. We definitely need to overhaul how banks make their money from interest. Especially when you realize that credit isn't even a fraction of what someone actually earns, and issuing it is essentially a form of forgery. A loan is only backed by a tiny sliver of real value, yet banks demand massive returns. I think I explained the math before—it's roughly 42% annual return on the initial capital if the interest rate is 7%. Just think about those auto loans where the total profit over seven years ends up being more than 50% of the car's price. If the initial cash used is only 1/6th of the total loan, the bank is basically multiplying its money 3.125 times over seven years on just 16% of the principal. Who wouldn't want a business where you triple your cash in seven years? It’s like having a savings account with a 17.6% interest rate. And that’s just a rough estimate. So, who can actually pay this back? What kind of legitimate business produces those kinds of returns by actually increasing the money supply? It's no wonder they're sitting on billions in profits that are impossible to ever pay back.

Hey there
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
I see things are heating up in this thread. Since none of us are professional economists, we’re probably throwing out a bunch of wrong numbers from their perspective.

The equality of the three deficits shows that in a closed monetary community, the total sum of monetary profits and losses equals the budget deficit. That holds true without credit. Depending on whether there is credit expansion, stagnation, or contraction, you could say that specific sum increases or decreases. The budget deficit shouldn't be financed by credit, but rather by non-credit money.

To clarify the subjects involved: these formulas apply to everyone. Kids, retirees, workers, corporations, government agencies, freelancers, etc. Anyone performing any kind of transaction involving money. It’s also perfectly expected that failing companies will accumulate monetary losses—more expenses than income. Will those be included in the current statistical sum of profits? Probably not. And cash stashed under a mattress isn't captured in statistics, though it definitely exists within the shadow economy.

When people talk about GDP and say we need a certain amount of growth, they're usually talking from the standpoint of state revenue. Since the government taxes transactions, a large GDP helps fill the federal treasury. The other question is how that increased GDP is actually achieved. If we account for inflation, it’s logical to expect a GDP that is, on average, 4% higher just to stay ahead of inflation. If we look at population, then logically, GDP should fall when there are fewer employees, and economic analyses suggest GDP falls twice as fast as unemployment rises. Also, GDP won't grow significantly without an influx of money. And that most often happens through credit. From what I've heard, you need to increase the money supply by 10% just to get a 5% increase in GDP.

However, you can't issue non-credit money based solely on GDP. That's where fraud becomes possible. For example, Company X has a valuable painting. They sell it to Company Y. Y sells it to Company Z. Z sells it back to Company T, who sells it back to Company X. Every single time at the exact same price. We’ve created quadruple the turnover, but the actual profit is zero. The painting didn't even have to move. Clearly, you don't need to issue non-credit money for a stunt like that. A better metric would be something like the sum of sales tax bases. Sales tax is paid by end consumers and businesses on the difference between revenue and expenses. If that difference is negative, the base would be negative and reduce the total sum.

When we discuss a 5% increase of non-credit money relative to the M1 money supply, it might seem small. There's a reason for that. Banks have used secondary issuance to deploy money and enable a larger GDP. It stands to reason that by using money from secondary issuance, earnings should be higher than 5% of the M1 mass.So, if it's clear to everyone that there isn't enough non-credit money to satisfy banking appetites, yet people claim this is a massive amount that would negatively impact prices, I have to ask: how do you intend to pay back those loans? It has to come from earnings, and people seem afraid of earnings?! Something is definitely wrong here—either bank profits are too high, or our earnings are too low. I'd say it's the former.

I think George Washington might be thinking a bit too naively if he believes he can compete with bank secondary issuances using non-credit money. My math shows that banks can achieve high returns on deposited funds through multiplication and charging interest on the total volume of issued credit. It’s obvious that there won't be enough non-credit money available if we stick to a fraudulent banking system (based on fractional reserve). First, because it generates inflation, and second, because it creates debt out of thin air. The banking system would need to transition to "real" banking—lending the bank's own money and the depositors' money without multiplication. An exception could be the Federal Reserve, which could produce money out of nothing.

The fear that injecting non-credit money would cause instant inflation is pretty much unargued. You can look at money supply movements since 1994, which show massive growth in the money supply without seeing that level of inflation. We also see major corporations taking out massive loans to buy up other companies without any automatic spike in prices. Why doesn't that happen? It’s obvious that there is currently more money in circulation, and if there weren't, prices would have jumped immediately.

There is this big fear that money saved under mattresses might suddenly turn into a massive wave of spending, but we really need to look at this realistically. That kind of capital could be placed back into banks that actually engage in real banking. We are talking about savings and investments here. How can stock offerings even happen if there aren't enough savings to buy them up? Once inflation drops, investing in stocks becomes a very bright prospect because profits would be drawn from non-credit money, rather than from someone else's credit that just adds more debt to the future. Of course, savings and profits can't just be any arbitrary number. Over-issuing non-credit money devalues everything, but holding back too much chokes production because people can't afford even the essentials—reports say the average wage just isn't cutting it right now.

For those who apparently can't be bothered to read my articles on my website, I'll explain once more why the Federal Reserve interest rates are high, even though they really should be lower. The Fed has an issue with the issuance of the dollar because those dollars are constantly being spent on imports. And when you spend that, you're draining foreign exchange reserves. That is why they have to use high interest rates to curb the dollar's circulation. Honestly, this crisis actually works in favor of the Fed, allowing them to maintain the dollar's exchange rate without a hitch. If there were a non-credit issuance of dollars, it would also create pressure to shrink reserves by spending them on foreign goods. This is a problem that needs to be solved through a collective awareness regarding the unnecessary purchase of foreign products. We could achieve a lot just by exercising restraint when it comes to buying stuff from abroad.

It is obviously difficult to move from a deep state of debt to a positive position, especially since we’ve been played by a banking system built entirely on partial reserves and a pure credit-based model. I think we should be considering a drastic cut in interest rates via a government mandate. These same interest rates create a massive cost, and credit is what triggered the inflation and the explosion of debt tied to the money supply in circulation (I've mentioned before how debt tends to grow by compounding both interest and inflation).

I think expectations are a bit too high—expecting a handful of us who realize the current system is a scam leading toward long-term ruin to provide a perfect solution immediately. I will never feel like such a genius in any job, let alone in a field where I am just a layman.

That doesn't change the fact that our evidence proves the current system is a sham and a betrayal of all citizens, as it violates constitutional rights (like Article 55 regarding fair wages).

As some might say, it isn't a question of what the government can do for me, but what I can do for the country. Each of us can take a small step for ourselves that becomes a huge leap for America—first, convince yourself, and then explain to others what kind of system we are actually living under and why it has to change. It also needs to be understood that imported goods should be bought out of necessity, not as a first choice.

We need non-credit money so we can convert part of our labor into monetary profit and continue investing and developing without creating endless cycles of debt. Non-credit money won't magically turn every loser into a winner, but it will prevent cash shortages and the bankruptcy of promising companies and smaller, less profitable firms.

Non-credit money seems to be our only real way forward. Transitioning from the current setup to a system based on non-credit money is something we shouldn't worry about until it's actually intended to happen, or rather, until we force the government to make it happen. There is no future in a purely credit-based system because we are buried in so much debt that there's no way to see how we'd ever earn our way out of it. Most importantly, this exact same problem exists in hundreds of other countries, which tells me the fault isn't with us, but with the system itself.

Best,
sites.google.com/site/financijskisustav/home/
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Gregory Williams7 said:Matthew Patel12, you have completely lost it. No offense intended.

Did I not already explain the origins of that GDP surge to you? And yet, you continue to insist on repeating the same tired arguments.
Only two people seem to be advocating for this theory regarding "non-credit" money. And for some reason, no one else appears capable of grasping it.

Both individuals share one glaring commonality: they refuse to listen to anyone. They persist in repeating the exact same points, even after those arguments have been thoroughly debunked multiple times. Why do they insist on this?

Here is an interesting system for you to consider:

External debt: 100% of GDP.
The average annual interest rate on debt currently sits at 7%. Is this figure sustainable?
The average GDP growth stands at 2%. Is this sufficient?

This is a situation that should concern you. It is a debt that can never truly be repaid. Everything else seems to be functioning perfectly.

I'll be polite and say I just stick to the reduced equality of the three deficits, which is standard and undisputed in economics. Since you can't disprove that equality, everything else you say is just a fairy tale for the naive.

I laid out examples showing why it's correct. Then you just write that it's been disproven. By what? Just a bunch of words? Prove it with math.

There’s a gap in economic knowledge here, and we all know why. It's to hide the fraud. And when I uncover it using math, you refuse to believe it. That's on you. Either prove with math that I'm wrong, or admit you haven't a clue.

I read this thread from the very beginning and saw you jumping in constantly. Sometimes you were right, sure, but you never once backed it up with actual math. Take that step and prove you're an expert.

You're just confusing other people on the forum with amateur attacks. Even though I'm a layman regarding economics and don't know everything, you can't just talk me around with words. You need concrete mathematical proof to convince me.

I know it's silly for me to start this thread since I'm not an economist, but it makes sense because economists haven't learned what they actually need to. This should be a prompt for economists to fill the gaps in their knowledge so we can finally discuss solving the crisis instead of just endlessly arguing with empty arguments.

Regards
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:What's the issue here? First, we have to balance the trade deficit... which means cutting imports. The easiest way to do that? Pivot consumers toward American-made products. By shifting demand to domestic goods, sales for American companies rise. That growth allows for more investment in R&D, which lowers production costs. Once those costs drop, we become hyper-competitive in the global export market, which ultimately drives up exports and boosts the GDP. 😉

Oh, one more thing... we should bring all the diaspora retirees back to the States... then you'll see how quickly we climb out of this crisis...

But what about solving the inflation debt and those money-losing entities?
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Gregory Williams7 said:Ultimately, this entire discussion is irrelevant. I asked you to adjust your spreadsheet to reflect a model where inflation sits at 2.5%, the Federal Reserve interest rate is 2%, and economic growth hits 5%.
Annual economic growth should cover the interest rates while still leaving room for savings. Set the interest rate at 2.5% and inflation at 2%. It makes no difference. In reality, inflation is a non-factor in this equation. The only thing that truly matters is whether there is enough economic growth to offset the interest. Given the circulation of money, those interest payments will be covered regardless.

Is this San Francisco or not? Let’s move past that. The only thing that matters is whether we have a sustainable system that allows for saving.

Hold on a second. You're trying to use a tiny window to prove that the credit system works, acting like it's just a simple matter of growth, the Federal Reserve rate, and inflation. And you actually expect me to run those numbers for you.

First off, do you realize that you can pay any interest amount using only the initial money supply. There's no circulation, meaning no GDP, which means the initial money won't multiply. That means there's zero monetary profit in that business. Why would anyone take out a loan for a business that generates no monetary profit? What am I supposed to calculate for you? Some kind of economic perpetual motion machine?

Everything I'm saying applies to a money-isolated community as a whole.

Regards
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·

Gregory Williams7 said:Nothing confuses me. If the Federal Reserve issues $x, and expects to receive $x + 0.25% back in a year...

And annual inflation is 5%, for example.

Money represents labor.

The Federal Reserve has lost 5% of that labor.

You have completely ignored the time component. It is entirely illogical to claim that this money costs the Federal Reserve nothing more than paper and ink. How much it costs the Federal Reserve is irrelevant. What matters is the value people assign to it. If I give you something, and a year later I demand 5% less in return, I have incurred a loss. It does not matter how much of that asset I still possess.

Oh, and you also have to factor in that debt owed to the Federal Reserve is growing at about 14 to 17 percent annually—if you calculate it based on how fast it doubles. So yeah, that's way higher than inflation.

Hey there.
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:It isn't dollars leaving; it's Euros... though even that is questionable... since most of this capital gets reinvested back into the US... meaning the money stays in the system and keeps circulating... what leaves are the Euros coming in via exports, tourism, investments, swap pensions, etc.

Getting the US out of a crisis is actually quite simple... reduce imports, increase exports and tourism revenue... and we're out of the crisis. Let's buy American and there won't be a problem... we don't need any credit-based money... just a shift in the mindset of citizens to value American products more, and that's it.

But how do you plan to tackle inflation? You know, the whole consequence of having massive amounts of cash circulating in the economy that keeps growing by the day. You can't just write off debt like it doesn't exist.

And how are you going to handle paying off debts when bank profits from interest rates are hovering near 7% of the GDP and showing no signs of slowing down?

Then there's the issue of the deficit spenders. Tourism profits aren't enough to satisfy the appetite of domestic profiteers, and those guys make their money off the losers. You can't just eliminate the loss-makers. New ones will always pop up until you've basically gutted the entire economy. The fact that these three deficits are essentially equal proves that point.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Ashley Barnes9 said:The analysis is generally on point, and it's all pretty easy to verify. The Federal Reserve publishes annual reports for commercial banks right on their website ( http://www.federalreserve.gov )

And there it clearly shows that total interest income in 2009 hit $22.8 billion, while fee and commission income was $4.3 billion, plus another $3.4 billion in other non-interest income. That’s over $30 billion being sucked up by the banking system. Only a small fraction of that money actually flows back into the economy through interest payments or wages for American citizens; the rest just leaves the country...

The media loves to make a big deal out of how bank profits are shrinking, but they conveniently gloss over the details that prove the banking system gets more expensive for us every single year.

Sure, profits might be down, but that's because banks jacked up interest rates first, and then bumped up their loan loss provisions—which exceeded $3.5 billion last year. And that $3.5 billion? They took it straight from our pockets to set aside just in case...

The next big heist happens through interest payments made on loans and deposits to parent companies (those big international banks), which exceeds $3 billion. On top of that, pure profit from fees and commissions is also around $3 billion, similar to the gains from other items like currency exchange, brokerage services, derivatives sales, and so on.

Both the media and political circles stay silent about this, so you're absolutely right when you say: "We need to expose this banking-political-economic-media scam."
because the news outlets that should be reporting on this either ignore it entirely or just toss out dry statistics without any actual context.

But luckily, there are some of us who aren't afraid to talk about these kinds of taboo subjects...

greeting

I mean, I get it. I really do. A deeper dive can honestly lead you down just about any path you want. It could turn up anything.

It isn’t enough to just sit around complaining about how bad things are getting. You have to actually pinpoint exactly why this is happening and walk through the mechanics of it. If we only ever focus on the fallout, we’re never going to find the actual root cause.

We've managed to entangle ourselves in these massive debts, all because the people in charge lack both economic sense and political wisdom.

I’m telling you, from a citizen's perspective, this whole thing feels like a total betrayal. I really don't care if the EU operates that way or if their system works differently. That's their business, not ours.

If I were a lawyer, I’d probably be drafting a constitutional challenge right now against the laws governing the Federal Reserve. It feels like they're directly trampling on fundamental rights—specifically the right to work and earn a living. Of course, if this ever went to court, you'd just have a bunch of lawyers arguing over it who don't understand a single thing about how economics actually works. Honestly, most economists aren't much better. There's a pretty high chance a lawsuit like that wouldn't even stand up, though.

Look, this isn't some taboo subject or anything. It’s just completely uninteresting to most people. That's the thing. You see it all the time—even those guys with economics degrees can't quite grasp the core of it. They honestly believe this whole system is some kind of blessing from above, like there isn't a better way to do things. They just think it's perfect as it is.

I’ve been sending out emails to all sorts of different addresses just to gauge the pulse of the community, and based on the total lack of response I'm getting, I've landed on the conclusions I mentioned earlier. After testing this whole stimulus-and-response system from multiple angles, I'm telling you right now: the government is heading straight into a ditch, and honestly, nobody seems to give a damn.

Honestly, that’s not even my problem. I’m just focused on making enough to cover my paycheck and hoping I can eventually retire with a decent pension. That's really all there is to it.

Economics schools are honestly something else entirely. I’m just a layman, really, but I’ve managed to wrap my head around it and actually prove—using those well-known economic equations—that the whole system is fundamentally unsustainable. It’s an inherent source of crisis. There’s just no way to offset that flaw in a way that works for all countries at once. What can I even say about them? Honestly, what kind of people produce such economic incompetents? How does their school even function like a marketplace where you just buy your way through exams? It’s wild to think that a huge chunk of their former students ended up working out of a precinct in Brooklyn. And then you have professors who won't even bother replying to an email, even when it asks something totally straightforward and specific. It’s baffling how professors at these universities don't seem to grasp the basic connection between the national deficit and corporate profits within the country. They actually try to stop students from even writing theses on the idea that fractional reserve banking is a scam. How do you call yourself a macroeconomist but lack any sense of patriotism or intellectual integrity? You can't be in this profession, seeing exactly why the country is failing, and just stay silent. You either have the knowledge or you're incompetent. There isn't a middle ground here. Why is nobody talking about the fundamental flaws in the money issuance system? Just a constant cycle of why, why, and why.

The media is its own special kind of disaster. They just don't react. It’s always the same thing—they just parrot whatever they're fed. If they actually bothered to try some real investigative journalism and dig for the truth, they would have uncovered what’s wrong with the system a long time ago. The issue isn't the information itself. Ever since the internet arrived, there is more information than you could ever need. And honestly, a lot of it is easy to prove. Up until recently, I actually believed there were journalists in America who worked with a conscience, people aiming for the greater good. But it turns out that's just not the case. Testing these same reporters against actual, important facts leads me to one conclusion: this is all interest-driven journalism. Sometimes it's just a little harder to figure out whose interests are being served when a certain story breaks. You can draw your own conclusions from that. Now, whenever I hear some sensational news headline, my first thought is always, "Who benefits from us hearing this right now?" And it really cracks me up when the nightly news focuses on stories about pygmy hippos or dogs surfing or riding motorcycles. That’s clearly peak investigative journalism right there. Even someone like Mr. Anderson—he’s specialized in economic issues so much that half the viewers probably think he’s some world-renowned economist by now.

People on these forums spend all their time arguing about things like currency devaluation, depreciation, cutting costs, shrinking deficits, or taxing banks, but there isn't a single ounce of sense being made regarding the fact that this entire economy isn't standing on solid ground. The credit system is nothing more than a pure analogy to that old story where a man saves himself from falling into a river by grabbing his own hair and pulling himself up. GDP growth is the hand pulling upward—while the debt (driven by credit) is the body pulling downward. And we just keep telling ourselves this is possible, refusing to realize the whole thing is fundamentally flawed. One group still believes everything is under control and we'll pull through if we just tighten our belts. Another group can't wrap their heads around the fact that we've been handed a system designed to lead straight to ruin. Some people simply cannot accept the math or the examples they see in an Excel spreadsheet they could easily build themselves. Others think the architects of this scam will just pivot once they see it’s failing (the recent G20 meeting proved they are wrong). A few imagine a perfect solution exists that is somehow different from what we have now. And some just think I'm talking nonsense and that the system is perfectly fine.

Most people don't even grasp that $40 billion in debt at 5% interest means the debt grows by $40 million every single day. That means in just 48 days, we increase the debt by the amount it cost to build the Golden Gate Bridge. Isn't that a massive red flag? Every day, the debt per capita grows by $3.25 just in interest alone. If we tried to pay off just the interest using the M1 money supply right now, it would only last us 3.2 years. The principal would remain untouched.

Does anyone realize that our debt is nearly 100 times larger than the M1 money supply from December 1993, and new money is nothing more than credit? This is literally written into the laws governing the Federal Reserve, which are aligned with the statutes of the EU and the ESCB.

If you think the Democrats or Republicans, or any other political party, is going to save us with a great platform, you are deeply mistaken. Lately, I feel like voting is just a waste of time. Sure, it might seem like manipulating results is easier, but it feels like the financiers behind both sides are exactly the same. In other words, regardless of who wins, their crew wins. Why do I conclude this? Because the proof that the system is a scam doesn't interest the Democrats, nor the Republicans, nor any third party or minor candidate. Explain to me why there are so many political directives, yet not one single one focuses on solving the crisis? It can't be a coincidence. The system functions exactly how it was designed to.

So, what actually pulls us out of this crisis?

Doubling down on the current system? Definitely not.

Buying foreign goods instead of supporting domestic industry? Definitely not.

Taking a vacation in Mexico? Definitely not.

Skiing in Colorado? Definitely not.

An endless expansion of government bureaucrats? Definitely not.

Joining the EU? Definitely notttttt.

And so on.

The only thing that can get us out of this mess is a collective realization of how damaging the current Federal Reserve laws are for every citizen and business owner in the US. Under those laws, the US voluntarily surrenders its monetary sovereignty and gets absolutely nothing in return.

Without that, we aren't moving an inch, and every single day is costing us $40 million. Does anyone have an actual idea on how to make that happen?

Best,
sites.google.com/site/financijskisustav/home
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Ashley Barnes9 said:What I mean is that printing any extra money—unless we’re talking about convertible currency, which obviously isn't an option for us—won't actually help anything until we fix this whole mindset and the way business is done here.

I won't get into whether that analysis is right or wrong. A few years back, Gustav Mahler was doing his own analyses, warning us that we were headed straight for disaster if we didn't boost GDP growth. Between all the various scams and shady dealings, we're in a bigger mess than we would have been otherwise. But it is what it is.

There's no moving forward until this fraudulent financial system is tossed out.

We need to expose the whole banking-political-economic-media scam. The lack of trust in the government is what prevents things from actually starting. The only real chance is getting everyone informed, and that's where the work needs to happen. How can the public push back if they don't even know which way the wind is blowing? It's easy to rule over people who aren't informed. Even the opposition parties and the unions are useless when it comes to actual American interests. You have environmentalists fighting over ten trees and a sidewalk in Washington, D.C., while the entire country goes down the drain.

The government decided their main goal is joining the European Union. But my take on how the EU works is that once we join, we're essentially screwed. As soon as we enter the EU and the Federal Reserve becomes part of the European Central Bank, our fate is sealed. To change things, you'd have to convince 500 million people. I can't even convince a handful of people with pure mathematical proof, let alone expect a small nation like America to successfully overhaul the entire EU system. That's why my family won't be voting for EU entry. Regardless of any other perks, controlling the money supply this way is just wrong and it destroys the economy.

The current administration's policy won't work because it hasn't worked for any other administration either. These economic advisors really ought to be fired. They should just admit, "We don't know," instead of wasting everyone's time with their ignorance.

Once economic experts can actually deal with non-credit-based money and finally agree on a solution, that will be the next step toward fixing this. Up until now, it's been a taboo subject—something nobody dares to mention. Everyone is too busy enjoying their paychecks.

Regards
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Gregory Williams7 said:In the USA: the Federal Reserve interest rate is 0.25%, while bond yields are hovering around 3.5% annually. Inflation is undoubtedly higher than that.

I do not have the exact inflation figures on hand because they tend to massage the data. However, it is certainly higher.

What we see in the heart of the matter is exactly your concept regarding non-credit money. This is money being handed out to the masses. It is a scenario where inflation exceeds the interest rate, ensuring the lender—the bank—suffers a loss.

The Federal Reserve sets that rate for the government and the banks. Then the banks turn around and make their own profit on interest. Plus, the principal has to be paid back. It is pretty obvious this isn't some kind of non-credit money injection. Only the stuff that gets written off could be considered non-credit. But written off to whom? If it is a write-off to a bank, then it is just an even bigger scam.

The central bank doesn't lose because it issues all the money, part of which creates inflation and part of which goes toward monetary profit. Interest is applied to everything (which commercial banks skim off the top). This is just a hole in macroeconomic knowledge that is confusing you.

A bank can't go under when it can source money almost for free and then lend it out at interest. Only the central bank can be forced into bankruptcy by demanding payment for issued money (which it basically created out of nothing—just paper and ink). And that happens when credit expansion stops and everyone has to pay back the full principal plus interest using whatever other money is left. You can already see that this is becoming a reality.

That is why Americans cannot pay back the debt to the Federal Reserve, and why the Fed keeps cutting rates; they have an infinite supply of dollars out there, so even at 250 basis points, they are making an absolutely massive profit.

Just think about it. If I understood correctly, all the banks are co-owners of the Federal Reserve here in America. They issue money to themselves at 0.25% interest and then lend it out at much higher rates. Whatever the Fed earns at the end, they split based on their shares. Since the money supply grows by about 14-17% every year, it is clearly endless profit at the expense of foolish Americans and the rest of the world.

I already explained that when the government takes a loan like that, the community only ends up with a monetary loss, while the government pays for goods and services with the interest. It is a scam and a fraud that couldn't get any bigger.

Even the assassination of John F. Kennedy showed what happens when bankers are stripped of what they believe belongs to them—the right to issue money. It matters so much to them that they resort to any measure to keep it. Reading through these proofs, it seems almost silly that we had a nearly identical law regarding the Federal Reserve, where they issue money to banks so those banks can profit from credit issuance to citizens (and the state), only for the final result to be an economic collapse (not going into the details of how that process unfolds). Meanwhile, the Federal Reserve's profit is negligible because it shouldn't issue too much money or it would destroy the exchange rate (just like the Fed does). It is pure economic masochism enacted by elected representatives. We have exactly what we deserve. And if we ever wake up, maybe then we will change it.

I opened this thread specifically to spread the easily proven truth that the system is heading toward ruin due to flawed money regulation, not just because of bad investments, waste, corruption, bad tax policy, bloated bureaucracy, too many retirees, etc. Even if we removed every single retiree today, we wouldn't succeed because there is no way to actually earn anything at a community level as long as commerce is conducted using money derived from credit.

Regards
sites.google.com/site/financijskisustav/home
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Ashley Barnes9 said:The M1 aggregate for May (the most recent data available) sits at $54.8 billion. Adding 5% to that isn't even $3 billion, and with all due respect, I just don't see how such a small amount would help the current situation here in the US...

I took a look at the statistics and checked the M1 money supply growth trends starting from January 2000. Back then, the M1 in the US was a modest $12.2 billion, but by the end of 2003, it climbed to $33.8 billion—nearly a threefold increase. During that same timeframe, bank lending jumped from $55 billion to $111 billion, and external debt rose from roughly €10 billion to about €20 billion.

Looking at the second period under review—from January 2004 (after the change in administration) up to now—the M1 aggregate grew from $33.8 billion to that $54.8 billion figure, which is only about a 70% increase over nearly double the time.

Meanwhile, bank lending surged from $111 billion to $236 billion, and external debt hit €43 billion.

It’s pretty clear that money supply growth in this second period is lagging significantly behind both bank lending and the rise in external debt. I honestly don't see how even $3 billion could fix the mess we're in...

My apologies if I disrupted the flow of the conversation. Instead of discussing hypothetical scenarios, I thought I'd bring in the actual facts and exact figures available on the Federal Reserve website: http://www.federalreserve.gov/monetary/hmonet.htm

My own analysis shows the US swallows about 3 billion European Central Bank units annually. But then you look at bank profits, and they’ve jumped up to almost that exact same amount. So really, there are just crumbs left for everyone else.

Regarding the volume of non-credit money and the actual math, here is the deal. Banks have basically pulled off a massive secondary issuance. You can tell because things are being stretched to the absolute breaking point. That whole bubble was what fueled wage increases and GDP growth. Since that mass of money is essentially unreturned debt, it’s hard to say what the fix is. Even if the government were to issue 20 billion in non-credit money, the banks would just swallow it all through their earnings, and they could use that money to issue even more credits via secondary issuance. It's a wash. A total wash. I’ve mentioned before that bank profits should be capped at 50% of the non-credit money issuance. Right now, banks are raking in huge profits, while non-credit money cannot be issued in those amounts. Then there is the issue of the years without any issuance. If you take the last 10 years with a 5% rate and adjust for 3% inflation, you get a multiplier of 2.15. Applying that to an initial 12.5 billion dollars gives you 14.5 billion dollars, which is basically a drop in the bucket in this current climate.

Regards
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
Gregory Williams7 said:Come on, Maria Thomas48, take that Excel sheet you’ve been working on and plug in an inflation rate of 2.5%, a bank interest rate of 2%, and economic growth at 5%.

Let's see if we can actually pay off the debt and still have some savings left over.

I think that's just wishful thinking. A bank isn't going to hand you a 2% interest rate when inflation is sitting at 2.5%.

Best,
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:Let's look at it this way... not all money is credit-based... consider what happens when the Federal Reserve buys up European Central Bank assets... so far, the Federal Reserve has injected roughly 24 billion dollars into circulation like that... does the Federal Reserve earn interest on that cash, and what percentage of total circulation does that represent? 😉The exact same thing occurs when the FED buys up toxic assets from bank balance sheets...

Every bit of cash the Federal Reserve buys back can basically be viewed as a byproduct of foreign subsidies, outside investment, and exports—specifically that portion of export revenue that actually stays in the hands of citizens. You could look at it as an extra injection of liquidity, assuming we weren't constantly losing money through foreign investments, imports, or pensions being paid out to people abroad. It’s worth noting that even if our balance of payments with the rest of the world stayed in the black, that money still has a credit-based origin. Some estimates suggest that’s upwards of 95%. Maybe having that surplus would let us pay down our debt, but it would just create a massive deficit elsewhere, leading to even deeper debt held by some other foreign nation. It really makes you wonder how much debt those countries can actually shoulder before they hit a breaking point and collapse. Anyway, I heard somewhere that banks are pulling in about $20 billion a year just from interest alone. When you compare that to a GDP of around $300 billion, it seems like way too much to actually be sustainable.

Because a positive trade balance basically just shifts the burden of debt repayment onto other countries—who, let’s be honest, are also stuck without any real solutions—I’ve been thinking about this. My take is that the government needs to be able to function financially with an eye toward actual prosperity, which means maintaining a balanced trade account. You know, where imports are offset by exports. If you look at it that way, the whole "three deficits" equality gets simplified down to a single equation (minus the credit side):

The state budget deficit? It’s basically just the private sector's profit. Think about it. When the government runs a deficit, that money has to come from somewhere. It flows out of Washington, D.C., and straight into the hands of businesses and individuals. So, if the federal government is in the red, the private sector is essentially seeing that as a surplus. It’s a zero-sum game, really. One side's loss is the other side's gain. Simple math, even if people like to make it complicated.


I don’t even know how many times I’ve tried to post this, but it just won't stick. Looking at the math, it’s pretty clear that everything the government invests goes straight into profit margins, and when it comes time to pay it back, all that realized profit has to be sucked out—plus interest. It creates a massive cash deficit in terms of interest alone. Basically, the state invests, people work hard to earn money, and then they’re forced to hand it all back along with extra interest on top. It means their labor couldn't actually be converted into liquid profit. If we want to claim we’re a capitalist nation, you have to be able to accumulate capital, right? But practically speaking, this kind of credit only hands the community a pile of debt. We got the goods and services, sure, but our hard work didn't yield profit; it yielded a loss equal to the interest payments if we ever actually managed to settle the loan. It’s pure masochism. The government can't pull a cash profit from an investment because that interest has to come from the initial pool of money—and since the trade balance is hitting zero, there’s less and less of that money left. So, it's obvious why Davor Šuker has to keep taking out new loans.

Everything would look completely different if we were working with non-credit money. First off, you wouldn't be dealing with principal debt, and second, there wouldn't be any interest hanging over your head. The benefits for the community would be massive. It basically turns human labor into actual savings, which can then just be funneled straight back into new investments. Look, you can't just move non-credit money around however you want. A lot of people seem to think they can just dictate where it goes, but that’s not how the system works. It doesn't work like that.

Regarding the Federal Reserve. I honestly think it’s better if they just buy up the junk. They’ve already pumped out such a massive amount of dollars anyway. It’s probably better to just take a hit on their earnings than to mess around with shady financial maneuvers that might actually expose how broken the whole system really is.

Hey there.
I was looking through this site about the financial system earlier. It’s basically just a deep dive into how everything connects. You know, all the moving parts that make the economy actually function. It feels like one of those things where if you don't understand the underlying structure, nothing else makes sense. It's pretty straightforward once you get past the technical jargon. Just a lot of information laid out there.
→ go to post
The Financial System and Money Supply in Banking, Insurance & Loans ·
crimsonfalcon10 said:🙂 Inflation doesn't increase the money supply... inflation is actually the result of an expanded money supply or faster money circulation...

Alright. Maybe I didn't word it perfectly, but the end result is identical. Credit expands the money supply. You get inflation. Right now, loans are basically the only way new money gets created. A portion of that credit stays in circulation and grows the principal, and debt tends to grow over time at a rate somewhere between the inflation rate and the average bank interest rate. If you're looking at 4% inflation and 7% interest, after maybe twenty-some years, that debt actually outpaces the original money supply and there's no getting it back. That’s actually a good thing for some people. If you're a banker, it's the best scenario imaginable. You end up with a lifelong client you can exploit however you want because they don't see it coming. You dictate the rules, influence changes to the laws, and so on. All while they remain oblivious to the fact that you used Federal Reserve regulations to trap them in debt slavery from day one.

We really need to make sure that doesn't happen to us. People are just so emotionally attached to the very things that ruin them—loans they'll never be able to pay off, inflation that funnels all created value straight into bank debt, governments constantly shifting tax policies year after year in a desperate attempt to hit some jackpot, leading to nothing but poverty and hopelessness, and working until you're 65 (or eventually 95), and so on. There's plenty more I could list about what people seem to love about a purely credit-based system, but this is enough.

Regards
→ go to post