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Money as Debt
- Thread starter WallstYouth
- Start date
Quote from gnome:
Estimates of world monetary growth are running 12-18% per year. Many are expecting world money supply to increase 50-100% over the next 5 years.
If world GDP is around 4% per year, the "excess money creation" leads to (1) inflation, and (2) money-pump rise in equity markets.
The World GDP is grossly underestimated for various political and practical reasons. China's GDP persists at around 8% despite efforts to curb growth.
One indication of the possibility of a grossly underestimated world GDP is the current level of dry bulk shipping freight rates being close to an all time high despite the huge increase in vessel supply
http://quote.bloomberg.com/apps/quote?ticker=bdiy&exch=IND&x=15&y=11
Nevertheless, this has little relation to the false claim that money represents debt.
John
Quote from h hubbins:
well going back to econ 101- in an island economy that produces 10 bananas and 10 dollars in circulation that over the course of time grows to 20 bananas you will have deflation (each daollar worth 2 bananas versus the original 1) unless you increase the currency in circulation.
Or if the currency is easily divisible, there would not even need to be an increase in the money supply.
You do not have to agree 100% with the video but to ignore everything he says is simply accepting being hoodwinked.
It's just simple math.
Quote from volente_00:
There you go again confusing wealth creation with wealth transfer. The stock market does not create wealth. It comes at the expense of someone else anytime you go flat on a position and make a profit. Every single dollar you pull out of the market comes from someone elses pocket. Wealth is not created just because you sold a stock $10 higher than where you bought it. Just because there is more money out there does not mean there is more wealth. The US banking system has a license to pump massive liquidity into the economy from lending due to the fractional reserve system and the FED only fuels it even more. Beyond all of the smoke and mirrors is the massive consumer debt and govt debt that only continues to climb. So while wealth looks like it is being created it is just offset on the balance sheet by the debt owed to others.
Oh common! Are u kidding?? How is it possible to separate wealth creation from wealth transfer?
If I can fix cars and fix cars for money do I create wealth? No, its only wealth transfer, the money comes from someones elses pocket.. LOL
If u make money in the stock market u are contributing to the wealth creating process.
Do u think itâs possible to replace the traders and investors that makes money with monkeys and still get the same real GDP growth?
the gold part of the video was OK....
and fractional gold reserves by the Central Bankers was recently revisited by Greenspan himself...........
Greenspan waved off the necessity for the CFTC to regulate gold derivatives, telling Congress to fear not, that the âcentral banks stand ready to lease gold in increasing quantities should the price rise.â
he didn't say the banks had good delivery bars to lease.....he said they can lease whatever they want to lease.....
go ask the Central Bankers for an audit of their "in the vault" bars and matching serial numbers that haven't been leased or leased multiple times
lotsa luck..............
and fractional gold reserves by the Central Bankers was recently revisited by Greenspan himself...........
Greenspan waved off the necessity for the CFTC to regulate gold derivatives, telling Congress to fear not, that the âcentral banks stand ready to lease gold in increasing quantities should the price rise.â
he didn't say the banks had good delivery bars to lease.....he said they can lease whatever they want to lease.....
go ask the Central Bankers for an audit of their "in the vault" bars and matching serial numbers that haven't been leased or leased multiple times
lotsa luck..............
http://en.wikipedia.org/wiki/Money_multiplier
this sums up the basic idea. with a reserve ratio of 10:1, banks pocket the difference between lending rates and deposit rates on 10 times the amount of the original deposit (while diluting all savings and spending power at the same time)
seems like a wealth transfer mechanism inherent in the way our money is created. it's true that consumers dont HAVE to borrow money, but the reality is that they are at an increasing clip and the govt/corps have no prerogative to stop this cash cow. we're trapped in this self destructive cycle where more and more leverage is required to maintain the status quo - so reducing debt isn't really an option for the govt or most households
if banks can continually lend all the money that they're paid back on a growing debt, at interest - doesn't this result in perpetual growth of their share of the money supply? what happens at the point that consumers can't run fast enough to finance and fall off the treadmill, do the banks foreclose on all collateral..
even if you choose not to participate in borrowing to finance your lifestyle, you still essentially pay a financing charge on your savings as inflation. and we're not talking 3% like the fed wants to pretend. food, energy, shelter ... healthcare
this sums up the basic idea. with a reserve ratio of 10:1, banks pocket the difference between lending rates and deposit rates on 10 times the amount of the original deposit (while diluting all savings and spending power at the same time)
seems like a wealth transfer mechanism inherent in the way our money is created. it's true that consumers dont HAVE to borrow money, but the reality is that they are at an increasing clip and the govt/corps have no prerogative to stop this cash cow. we're trapped in this self destructive cycle where more and more leverage is required to maintain the status quo - so reducing debt isn't really an option for the govt or most households
if banks can continually lend all the money that they're paid back on a growing debt, at interest - doesn't this result in perpetual growth of their share of the money supply? what happens at the point that consumers can't run fast enough to finance and fall off the treadmill, do the banks foreclose on all collateral..
even if you choose not to participate in borrowing to finance your lifestyle, you still essentially pay a financing charge on your savings as inflation. and we're not talking 3% like the fed wants to pretend. food, energy, shelter ... healthcare
Maybe status quo is the best solution. I agree, it seems like the money creating process is a wealth transfer mechanism. Wealth is transferred to the government and the holders of bank stocks. But what would be the alternative?
If money supply growth didnât erode the value of money, it would be possible to get a share of the growing economy even without taking market risk since the amount of goods in the economy would grow when the economy was growing. More goods chasing the same amount of money, natural deflation. Money would buy more and more.
Imagine that u inherited a lot of money, u would not even need to learn how to invest to be able to get a good real return on ur money. With status quo at least the rich have to do some kind of work or take market risk to keep and accumulate more money. Iâm not in favor of wealth transfer in general, but this seems like the fairest way to do it. Inflation is a tax on savings.
If money supply growth didnât erode the value of money, it would be possible to get a share of the growing economy even without taking market risk since the amount of goods in the economy would grow when the economy was growing. More goods chasing the same amount of money, natural deflation. Money would buy more and more.
Imagine that u inherited a lot of money, u would not even need to learn how to invest to be able to get a good real return on ur money. With status quo at least the rich have to do some kind of work or take market risk to keep and accumulate more money. Iâm not in favor of wealth transfer in general, but this seems like the fairest way to do it. Inflation is a tax on savings.