Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
We simply cannot know everything. A doctor isn't expected to be an expert in electrical engineering, physics, or agriculture. A single corporation can't lead the market in winemaking, automotive manufacturing, and software development all at once. Even a nation's strengths are dictated by its geography—you can't build a winter tourism empire if you're located in the middle of the Sahara, just as you can't focus on large-scale farming if you're situated in the Arctic. Ultimately, everyone has the potential to prosper through the exchange of goods and services—but only IF they actually have something valuable to offer in return.
Nostradamus As I stated before:
However, if Germany operated under a pure free-trade system without those extra protections, their economy wouldn't be nearly as dominant. They would be far less developed because they wouldn't have the ability to exploit others to fuel their own growth.
Good grief, what a mess... If anyone is being taken advantage of here, it’s Germany. What exactly are we handing over to them? Low-end tourism and some basic agricultural goods. In return, we're importing sophisticated machinery, high-quality tools, Fords, and Mercedes-Benzes. On top of that, they don't even pay countries like Greece for their exports; those nations are essentially living off Germany's back. I have no idea which idiot in Germany actually agreed to join the European Union.
Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
You missed the point again. The profits generated by the Federal Reserve from that 6% discount rate go directly into the U.S. Treasury. The Federal Reserve isn't some private entity like you seem to think it is. You need to view this as just another tax levied by the federal government. The state borrows from private banks—but by what right? The root of the issue is that the government spends far more than it collects in tax revenue. It’s exactly like you spending more every month than you actually earn. Whether there's interest involved or not, you're broke because you're living beyond your means. I realize it hasn't clicked for you yet, but monetary regulation is an entire science. You seem to believe the whole economy can be boiled down to two elementary school formulas. If you keep studying, you'll eventually realize that isn't how it works. People dedicate their entire lives to specializing in economics; they study for decades, and some even win Nobel Prizes for developing entirely new models and discoveries. Believe it or not, that actually happens.
rustydrifter72: "Quote:"
Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
You still don't get it... The Federal Reserve doesn't prioritize dealing with individual citizens. But even if they did, what’s the actual issue? Interest is paid monthly and funneled back into the budget, which then gets redistributed or handed off to banks. Those banks distribute it among their employees and managers, leaving whatever is left for the shareholders—who just go out and buy more Mercedes-Benzes. Then, some executive from Mercedes-Benz heads down to Florida for a vacation, and we end up footing the bill with those ridiculous $3 fees for trash that isn't even worth fifty cents to manufacture. With that money, we might actually manage to pay back the principal and interest to the bank for that Ford we plan on buying once the season is over. The real problem arises if that German executive decides to move his operations to Turkey because it's cheaper and more profitable there; meanwhile, we're stuck here trying to drive a new Ford.
I am glad to see you have evolved your thinking. You hit the nail on the head: you must have something of value to offer BEFORE you attempt to leverage credit. If you don't have assets, do not take out loans. Your "brilliant" idea was originally just to distribute non-creditworthy money so everyone could go out and buy a Ford, while providing absolutely nothing in return. That is simply communism. And believe me, it has failed everywhere.
rustydrifter72: "The current economic trajectory remains deeply concerning. While some analysts suggest we are approaching a period of stability, I believe we are actually witnessing the arrival of a Trojan horse within our fiscal policy. We cannot simply ignore the underlying volatility."
Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
Banks only turn a profit when they lend money, not when they sit on it. I agree that this cycle can’t continue indefinitely, but that isn't because of the banks themselves—it's because you eventually run out of reliable borrowers. If you have one segment of the population that is responsible and saves money (by choosing to forgo certain luxuries) while another segment spends recklessly, banks will inevitably start extending credit to low-quality debtors. We have already established the fact: banks make their money by deploying capital, not by accumulating it. In the past, it was so easy in America that you could practically walk into a branch, show them a single piece of paper stating your income, and walk out with a mortgage. However, this represents a fundamental "bug" in capitalism, which is currently being patched through moderate inflation. This mechanism effectively ensures that someone who simply saves diligently over fifty years will see their purchasing power eroded, while the borrower ends up paying interest on a principal that is effectively shrinking in real value.
rustydrifter72: "Quote:"
Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
It doesn't necessarily have to be about suffering; it should be about lowering costs or boosting productivity. China struggles with incredibly low productivity, but they offset that with dirt-cheap labor and people working themselves to death. Taking out loans just to maintain a lifestyle is absolutely destructive. If those credits were being used to build new farms or factories, that would be a completely different story. Globalization is a massive win for developing nations like China and India. Initially, the West benefited by "exploiting" their inexpensive labor, but that allowed these countries to acquire the necessary expertise and technology, ensuring they come out on top in the long run. Through sheer hard work and manufacturing, they are steadily raising their standard of living while the West’s begins to decline. Globalization levels the playing field between nations. It is fundamentally positive for the human race, regardless of how much we in the West dislike having to sacrifice our own comforts.
Maria Thomas48 said:g. I respect your effort to cloud everything over with stories, but you're just repeating the same things as Closeau. You are intentionally skipping over any actual direct answer.
The whole text is nothing but platitudes. For example, specialization. Like, why would we specialize in anything if we aren't making money off it? And if we are making money, then everyone in different specializations can't all be profiting. So that definition is just pointless.
However, under a system of free trade—without all the extra fluff—Germany wouldn't be doing so well economically. They would be much less developed because they wouldn't be able to exploit others to fuel their own growth.
For instance, you’ve elevated the role of the central bank to something divine, and I've written quite a bit about the central bank, but the most important thing is that the whole concept is a banker's invention. It's like a Trojan horse. A gift intended to destroy you. Just one simple thought experiment can show you what a central bank actually is: Combine all the commercial banks and the central bank into one single organization. And what do you get? You get a money printing press where a meager 50 million plus 750 million from corporate taxes gives the state enough to lend money back to the state at 6% interest per year. Hey, I want in on that business too! And what do you have to do to make that work? To prevent credit inflation, you just raise interest rates. Easy. That's my question. What other business does that? And you can't lose customers because everyone always needs money.
I know money multiplication in banks doesn't happen instantly. I wasn't born yesterday. But that doesn't change the end result.
The time gap—credit versus repayment—is a reality, but it's a moot point because there is no way to find the money required to pay the interest. So it's just a fairy tale for the naive. Let's say: the Federal Reserve lends money to all citizens at $3333 and demands $3667 back in a year. We already know that won't work. But we are living in that exact situation: we have 12,444 in primary money from the Federal Reserve and we need to pay interest on it just so it reaches the budget. Where does that come from? The Federal Reserve doesn't care; that's just how the law works.
One could say plenty about the Federal Reserve, but they just operate according to the crooked laws we passed ourselves.
Quincy:| He gives you a loan so you can sell something, but you still have nothing to offer him in return and you can't pay the loan back. |
That is economic slavery right there. Why didn't he give you cell phones in exchange for what you have? If you have nothing, what good is a loan? And what good is the phone? First, go do something productive for the economy.
Quincy:| Hello??? What do you mean a reduction in money supply??? The Federal Reserve regulates monetary aggregates without any issue... Do you honestly think banks eat money??? |
I am talking about a reduction in the money supply in a way that ends up as someone's profit (savings). Whether it's a bank, an individual, or a corporation. That money sits deposited in bank accounts. The person looking to get money through credit borrows that money and can repay the principal, while the interest is paid from the remaining money that isn't being held for savings (from transaction accounts). The bank covers its costs, pays itself, and pays the savers—those same people who had excess money and aren't spending it. Practically speaking, this means there is even more money available for loans, and even less money available to actually earn. Only a fool would think this process goes on forever without consequences. In practice, this is called a lack of spending, while banks get fat. "Banks really do eat money." Their job is to accumulate money because that's how they reach new profits. And profit is never enough, is it?
Quincy:| The issue is partly monetary, but not quite in the way you’re thinking about it. It comes down to the bad exchange rate set when the dollar was introduced and how we artificially propped it up through debt. Look, if a German worker produces a car for $20000 and an American worker produces one for $40000, then the American is half as productive, period. In that scenario, the exchange rate needs to be two dollars to the mark. If people hadn't taken on all this debt, there wouldn't be a crisis, because any smart American wouldn't sit around idling—they'd just trade their currency for marks to buy foreign goods that are twice as cheap. Eventually, the foreign reserves would dry up. But they aren't drying up because money is constantly being pumped in from abroad. Devaluing the currency now is just a fast track to ruin for most people. There aren't any easy or painless fixes left. Not even a hundred Molotov cocktails could solve this; they'd probably just make things worse... |
That makes sense if you're looking at emerging economies. But if energy prices are the same everywhere, where is the balance? All other prices are based on those energy costs. This means in an open economy, a less productive industry is forced to suffer because it becomes "too expensive." You can't prevent that unless you rely strictly on your own strength. Now, imagine we pay more for our own products because our productivity is low, but we also have tariffs making foreign goods too pricey. Honestly, paying more for domestic goods isn't the issue; the government can always print enough money to cover that. What actually makes a product expensive? High labor input? That just means our standard of living will be lower, but at least we won't be drowning in debt. With an open economy, it gets even uglier. People maintain their lifestyle by taking out loans, which just hollows out the actual economy. This whole idea of specialization is a myth—I think I explained that earlier. It's just a buzzword used to push globalization. And let's be real, globalization isn't for the benefit of the workers; it's about exploiting them. Everyone knows that. Anyway, the topic isn't international trade per se, but it definitely impacts the stability of the financial system. Less developed systems simply cannot survive in open trade; they just collapse. History has proven that over and over.
That's a good read regarding Argentina's collapse. You can see there what happens when you aim for a stable exchange rate, privatize core industries and banks, and sign free trade agreements.
So, for America, implementing a stable exchange rate, privatization, lowering tariffs, and maybe joining a free trade bloc is a guaranteed path to destruction. It's exactly like Argentina. And it's happening because the entire system is built on money acting as credit. Because of that, we have to deal with the issue of credit-based money specifically, otherwise, we are just following Greece's trajectory at a steady pace.
Non-credit money is our only way out. Some call it fiat money. On top of that, you'd need high mandatory reserves for banks (over 50%) and a trade surplus. Price controls are obviously necessary to keep the currency stable. Doing this could jumpstart the economy, boost employment, reduce debt creation, and clear out national debts. If someone doesn't believe that, they only have themselves to blame. Of course, there are no real-world examples, because for the last few centuries, banks have been allowed to engage in massive money multiplication.
Over at http://mandrilo.com/index.php/stop-bankama, there's a historical breakdown of how banks operate. Enjoy.
There are plenty of real-world examples if you bother to study communist history. You can print out as much non-credit money as you want and implement all the price controls you like... and you'll successfully drive the economy down to the level of North Korea or Cuba. But hey, if that's what people want, be my guest...