They Get The Cake While We Get The Crumbs

They were referring to brioche when that was said. A really rich type of bread. Qu'ils mangent de la brioche. I thought that was cool. Although Marie Antoinette never said that.

 

That's a great sentiment.

On the other hand, more people have been lifted out of extreme poverty in the last 30 years than pretty much any point before that. The system isn't perfect, but it's the best of not perfect choices.

 

While economic textbooks claim that people and corporations are competing for markets and resources, in reality they are competing for money, using markets and resources to do so. Greed and fear of scarcity are being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is enough work for everybody in the world, but there is clearly not enough money to pay for it all. In fact, the job of central banks is to create and maintain that currency scarcity.

 

the goverment creates money so that we can pay them taxes ... so they can create more money .. so we can pay tax again ...more money...more money. the money just goes back and forth changing hands but kinda seems like its fake and doesnt really matter. it only matters because people think it does or think that it really means anything or is worth more than the paper its printed on.

 

I don't know much about the American setup, altho I can work it out. Anyway, my family have been into politics in Britain quite a bit. One former prime minister, a chancellor and a few others have been family friends over the yrs. To sum up, the political system is window dressing, bullshit, a charade for the gullible/unitiated to lap up. Thats come from a fmr prime minister. So my guess is that you are bang on with your statement re the US. Don't take any notice of any super liberals or tea party brigade talking crap at you. Like in your sig, so many people are a walking, talking proof of confirmation theory.

Whether or not the system is a scam/corrupted is beyond debate. People need to start focussing on how to solve it.

My concern is that the system has become SO corrupted I have serious concerns that it could destroy itself at some point. Because the vacuum wouldn't be filled by some utopian social dream. But by an outright form of corporative fascism, coated in a very thin veneer.

 

I don't actually agree with a lot of the critiques of the financial system. The main problem is that it operates as a cronies club, and allows fraud to flourish.People with no pride or talent are able to make decisions that are above their competence. And governments are intimidated/manipulated by them. Additionally, those in control all too often have vested interests. I understand the desire to limit consumption. But what is unacceptable is the way in which human capital is so stockpiled and unused. Because, even today they have yet to devise a way of controlling human capital in the way money is controlled.

The system needs freshness, the encouragement of talent, and honesty With a bunch of duffers who's families have largely run the system for the last 200 yrs or more, we won't get that. The spiel is that they want "stability", but in practice they are giving us stagnation, scapegoatism and perverse gimmickry.

 

Trump will make America great again

 

america is obviously headed towards the largest economic crash in history, possibly the world.. It's going to be chaos I tell ya.best way to usher in a new system is have people begging you for food and water. They will accept anything just to live. Please government help, we are hungry, my kids are hungry. Please..ok. In order for you to get food, you will need to fill out this form with 3 types of identification, we will need to do a full body search and physical and we will download all of your information on this cool chip that we will implant in your arm. There is now no cash. The United nations has become the new world government. Get to work.

 

Money in and of itself acts as a unit of account (it makes it easy to measure value), a medium of exchange (easier than bartering) and a store of value (ie: it doesn't spoil). That's it.

The overall supply of money is important in the way that it affects prices and investment. They're two separate issues.

 

And vice versa. Can you see how you are not any different in regards to that last statement about Noxious?

About you don't giving any shits: I guess you had to write that out in order to make that clear, because otherwise nobody would think that (yes yes, you don't care about what other people think )

Quoted for emphasis. I would almost say I hate to admit it ( kidding mate) but you touch on a very important truth here. Conspiracy or not, where it comes to the monetary system we are all part of it and yes, apathy, lazyness and the majority of the population thinking it can not change or this is the best we can get is a very large part of why shit is like it is.
I wouldn't focus on guilt here, but on (shared) responsibility. Of course it is always easier to accuse and nag on either the 1% at the top and the 99% of stupid people and complain on a forum in kind of a nihilistic and even slightly misantropical way Especially when they ask for proof for outrageous claims we are suppose to take seriously because they are repeated a lot by people that post in conspiracy forums (but when it is asked why they think it is true they are told 'I don't have to provide anything' ). Yes, they are the apathetic sheep, not those who (claim to) don't give a shit what others think and laugh and shake their heads at the stupidity of the 99% in order to subconsciously feel a little better about themselves (just enough to make their own equally pointless life bearable?)

edit: spelling

 

I know that personally I've always had enough to get by (and save for a rainy day, so I guess in some ways I've had more)... and most of the people I've known throughout the years have been the same, so I really have to wonder just how much of the outrage is driven by suffering/empathy and how much is driven simply by the fact that people are angry that when they compare themselves to the very rich, they come up short. Maybe I just don't know enough poor Westerners.

I've never wanted more than I have and having travelled to truly poor countries, I have no doubt in my mind that I could never be considered truly disadvantaged... to be honest, I wouldn't even mind wealth imbalance if I knew for sure that the rich were actively trying to improve the environment, or trying to oust oppressive regimes, or trying to educate people then I would be all for it-- but the truth is, despite some rich philanthropists, they're either not spending their money at all, wasting it on stupid shit, or putting it back into a system they have no interest in improving (as it works so well for them).

The problem isn't that we don't have enough democracy or that people in general are too stupid, it's that the people with power and money are just as apathetic and dumb as the people without it.

 

The dollar is based on credit. Every dollar in existence represents a dollar of debt owed by an individual, a business, or a government unit. Someone has to borrow every dollar in circulation, cash or credit. Money is created as loans and thus represents debt. The interest associated with this debt/money is not created as money when bank loans are made. The interest can only be paid if additional loans are created as money. This means there is never enough money in the system to pay bank interest without creating more debt, so this interest is essentially unpayable.

 

That's all. Nothing more to it than that. You can go back to sleep now feeling safe that people smarter than yourself are in control and want what's best for you.

 

I don't think this is true because I would have heard about it on CNBC.

 

Yeah, I was just taking a shot in the dark. I should have cross-referenced it with something from the MSM. My bad.

 

So you got nothing then.......
pretty much what I thought.
More vague generalizations.

 

Let's start by describing the financial system.

A financial market consists of people who save money (people, insurance companies, pensions, etc.) and would like to lend it with interest and people who would would like to borrow money (firms looking to expand, people taking out mortgages, etc.). They connect in the market for loanable funds through financial intermediaries (commercial banks and investment banks). Investment is crucial for creating economic growth in society - economic growth (increases in GDP) come from increases in productivity, increases in productivity come from increases in capital, and increases in capital come from investment. Commercial banks take deposits from people and lend them out to other people. Investment banks help firms find investors (ie: by offering IPOs or finding private investors). However, this financial system is fragile.

The first major failure occurred in 1907 - however, the run on "trusts" was ended by JP Morgan of US Steel (this however spurred the creation of the Federal Reserve System to begin regulating banks). The next happened the during the beginning of the Great Depression - bank runs on commercial banks caused many of them to fail. People lost their savings, and banks became reluctant to lend out money (increasing the duration and extent of the recession). In response, the federal government (through the central bank) began limiting the risks they could take. This system worked well for nearly 60 years, but finance is constantly evolving and in the pursuit of greater returns banks and shadow banks (institutions that function like banks but are not regulated like banks) repeated the same mistakes (asset-backed commercial papers [bad mortgages] and auction-rate securities) resulting on another run. Many investment banks collapsed - some were allowed to fail (ie: the Lehman brothers). Others (such as AIG), were saved by the federal government. While many feel this wasn't fair (especially as their management was still receiving huge salaries) - without a functioning system of financial intermediaries, the economy's contraction would be much worse.

Commercial banks accept deposits and provide loans. Under the fractional reserve banking system, they are able to lend out each dollar in savings multiple times (although they are required to keep a certain fraction of their liabilities in reserve). Thus the central bank allows them to essentially create money. However, the amount of money they create is controlled (indirectly) by the central bank (Federal Reserve in the US) through the "interest rate" (the Fed Fund Rate in the US). Central banks control the interest rate by adjusting the fractional reserve requirement, adjusting their lending rate, and (most importantly) open-market operations where they adjust the supply of money available by buying bonds (increasing the amount of money in the market) and selling bonds (reducing the supply of money in the market). Thus the central bank controls the money by controlling the interest rate.

The interest rate is used to help control the aggregate demand of an economy. During an expansion, aggregate demand can become too large, creating inflationary pressure. The central bank will use tight monetary policy (increase the interest rate) to reduce aggregate demand. During a recession, they will lower the interest rate to discourage saving and encourage investment. The Federal Reserve's interest rate is relatively predictable (according to the Taylor Rule) and there has been no huge deviations from this.

There is room to improve this system (further regulation and criminal punishment for those misrepresenting securities, and I would argue for more independence from the federal government) - but will someone please explain the major flaws beyond it being controlled by evil shadow bankers. Because right now the system works - every month it is relatively hassle free for me to invest. :wall:

 

It sounds like you're actually able to wrap your head around all that stuff. I have always found it tough to understand the creation of money aspect. How do they know how much to create? Is it based on how much gold there is somewhere? It isn't is it. Well where does it come from then? Makes so little sense to me.

I really enjoyed reading your dissertation but I'm not sure what we're talking about it here for. I have come into the middle of the conversation without going back and reading the history of this discussion. Oh well. Thank you for writing all that!

 

Yeah, I believe I just did. Did you miss this?

The dollar is based on credit. Every dollar in existence represents a dollar of debt owed by an individual, a business, or a government unit. Someone has to borrow every dollar in circulation, cash or credit. Money is created as loans and thus represents debt. The interest associated with this debt/money is not created as money when bank loans are made. The interest can only be paid if additional loans are created as money. This means there is never enough money in the system to pay bank interest without creating more debt, so this interest is essentially unpayable.

 

And am I to assume that you disagree with this:

While economic textbooks claim that people and corporations are competing for markets and resources, in reality they are competing for money, using markets and resources to do so. Greed and fear of scarcity are being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is enough work for everybody in the world, but there is clearly not enough money to pay for it all. In fact, the job of central banks is to create and maintain that currency scarcity.