Solutions - Nationalize the Banking System and Print Greenbacks

[convexx]

^ ^ ^ IQ Test ^ ^ ^

 

[Ucan'tEatBonds]

You are right that people are the problem and are allowing this with their ignorance.

However, keep in mind that eduction program has been designed by the government,

GOVERNMENT GETS WHAT GOVERNMENT PAYS FOR

Government wants idiots for citizens, government gets idiots for citizens. It is done slowly, incrementally, so nobody notices, and those who do are called crazy conspiracy people.

I have been calling for the replacement of the Legislative Branch of government since September 11th, 2001, when two F-15s received scramble orders out of Otis, to fly a heading to an altitude where no commercial Boeing 767 had existed for more than nine (9) minutes - taking both F-15s up to an altitude that would guarantee absolutely no contact with a commercial aircraft, whatsoever.

Government is not the problem. We The People, are the biggest problem our nation faces. We don't have our act together and therefore, government is having its way with us. We are uneducated in the things that matter most. We are so blinded by the here and now that we fail to study the mistakes of yesterday and by definition plan to fail in the future. We think we live in a Democracy when the founders gave us a Republic.

Jefferson, told us explicitly what to do when things get this bad - and they have been bad since 1913 - not with the election of Obama, Clinton or Bush 41\43. But, who the heck knows what Jefferson, said anyway or why it matters.

I worry for my country. I worry a great deal. I don't know that we have another 200 years left as a free standing Republic. I just don't know.

$17 trillion in debt. Nearly 3 times that much in outstanding netted credit. Sigh. We've got ourselves into some serious trouble. China, is getting stronger - not weaker. The tide is changing directly under our feet and our generation is just sitting by and letting it happen. We could have had Thorium Reactors up and running, providing the energy needs for ALL American Households from coast to coast and lowering our energy dependence on foreign entities, but no. We ran for the profits in oil instead of fueling the future with cleaner and virtually unlimited (for all practical purposes) supplies of energy. Meanwhile, China, develops it own clean reactors with the nice little added benefit of never undergoing a meltdown by design.

We've got it all sdrawkcab.

 

[achilles28]

Firstly, like I said, there is no dilution and no reduction of purchasing power. Secondly, are the bank shareholders not "people"? I mean it's the beauty of capitalism that you can become one of the recipients of banking profits, simply by buying a share of, I dunno, JPM or Citi or whatevers... Thirdly, banks risk virtually none of their own "private" capital? As a UK taxpayer I am a proud owner of RBS and lemme tell you, they sure did risk a lot of their capital on all sorts of random sh1t. They weren't alone, either.

1. Every new dollar printed or digital, reduces purchasing power by an incremental amount. What do you suppose counterfeiting is? Because it's a loan that must be paid back, is immaterial. The value of that loan is derived from the debauchment of purchasing power from existing dollar holders. Banks simply have the authority to loan out The Peoples money without compensating the people!! This is theft, and backwards.

Now you're engaging in semantics and tap dancing to avoid the issue. Please explain to me where the value of newly created money is derived from?

2. Modern banking is NOT capitalism. Capitalism implies consensual exchange between two or more parties. Modern banking is rooted in fraud and theft. Banks loan out the peoples money by debauchement, without their consent, and reap the profits. Banks and borrowers consent to this. But not the owner of actual capital being loaned out.

3. See above.

I don't see how I am debating straw men. You specifically talk about the evils of fractional reserve and the nationalization of the banking system. I am trying to suggest to you that, while certainly far from perfect, our current system is, most crucially, capitalist. You want to replace it with a basically socialist setup to fix what you perceive as an "unfair" distribution of wealth and income. As I have a bit of personal experience with socialist experiments, I disagree and am arguing against your suggestions.

I never said anything of the sort.

Our banking system is far from capitalist. It's more fascist, then capitalist because it coerces a major party to every transaction.

A socialized banking system rewards the people who actually own the capital being loaned out. Which is exactly what you argued to begin with.

You believe in just compensation only when it suits you. Interesting, eh?

 

[achilles28]

It seems a key word in your statement I quoted above is the word "bad" to characterize U.S. debt . Is the debt really "bad"? The way that is typically decided is through the market, is it not? I would have to say that so far, according to the market, the U.S. and Japan have not been pushing "bad debt". I am one of the few, however, that believes that the market is often wrong.

Everything works until it doesn't?

Remember Greece, Italy, Portugal, Spain, Ireland?

Look, you cheerleaders of the system are cheerleading America right over a cliff. The interest on the total stock of debt is killing the economy. And the Federal debt has past the point of no return.

We HAVE to end debt-backed money. That's the only solution. There is NO growth. The marginal productivity of debt has been flushed down the toilet.

 

[achilles28]

Lets get back on track:

60 Trillion in debt-backed money, in existence. At an average interest rate of 3% = 1.8 Trillion the economy pays each year to bankers, in interest costs alone (~10% of GDP). "Mature", "slow-growth economies"?????

US Debt-to-GDP well over 100%, and growing. Greece, anyone???

Since 2009, US added ~1 Trillion to the national debt, every single year.
http://www.treasurydirect.gov/govt/reports/pd/pd_debttothepenny.htm


Interest cost on the national debt consumes all GDP growth. While we add ~1 Trillion a year to the principle...
http://www.treasurydirect.gov/govt/charts/charts_expense.htm

 

[Martinghoul]

1. Every new dollar printed or digital, reduces purchasing power by an incremental amount. What do you suppose counterfeiting is? Because it's a loan that must be paid back, is immaterial. The value of that loan is derived from the debauchment of purchasing power from existing dollar holders. Banks simply have the authority to loan out The Peoples money without compensating the people!! This is theft, and backwards.

Now you're engaging in semantics and tap dancing to avoid the issue. Please explain to me where the value of newly created money is derived from?

2. Modern banking is NOT capitalism. Capitalism implies consensual exchange between two or more parties. Modern banking is rooted in fraud and theft. Banks loan out the peoples money by debauchement, without their consent, and reap the profits. Banks and borrowers consent to this. But not the owner of actual capital being loaned out.

3. See above.

1. Like I have said already, you're neglecting a basic rule of double-entry bookkeeping. Specifically, the value of the newly created money is derived from the value-added produced by the project which is being financed with the loan. This is what makes it different to counterfeiting. Since you keep insisting on your interpretation, we're going to have to agree to disagree.
2. Don't understand this at all. For a loan to exist, you need to have a borrower and a lender, who agree to enter into the arrangement. If that is not the very definition of consensual, I don't know what is. Moreover, if you're a lender who is not happy with banks lending out your money, take your money out of the bank and lend it out yourself. You have the freedom to do all these things and that's what capitalism is all about. I would argue that the government-dominated system that you're advocating is a lot more restrictive and, to use your terminology, "fascist". It's the sort of system that was in place in the Soviet Union.

Our banking system is far from capitalist. It's more fascist, then capitalist because it coerces a major party to every transaction.

A socialized banking system rewards the people who actually own the capital being loaned out. Which is exactly what you argued to begin with.

You believe in just compensation only when it suits you. Interesting, eh?

See above. I believe in just compensation, period.

 

[redbox]

To whom is all this money owed. And why cant we just have a debt jubilee?

 

[StarDust9182]

Well actually there is a critical difference between what Zimbabwe did and what the other countries you mentioned do. Though the lay person refers to either what Zimbabwe did or what the Fed does as "money printing," and even economists may sometimes refer to what the Fed does as "printing," economists know the difference between what Zimbabwe did and what the others countries do. They correctly refer to what Zimbabwe did as "money printing". What the U.S. and other countries generally do, however, is to issue bonds that the central banks buy. When those bonds are purchased by the central bank with newly created money, the new money becomes linked to debt. (This is probably the origin of the idea of money as debt.) In Zimbabwe's case they simply printed money without linking it to debt, and used that newly printed money to pay on debt!

I believe this critical difference between money printing the Zimbabwe way and creating money the Fed way, by linking the new money to debt, is the Reason Bernanke, when questioned about "money printing" in a Senate committee hearing, responded, "We're not printing". And technically he was correct. Technically, printing is what Zimbabwe did.

When new money tied to debt is created, the new money will have value so long as the credit of the issuer is good and the issuer may continue to borrow, from other than their own central bank, at reasonable rates. If a countries credit is so bad that no one other than their own central bank will buy newly issued sovereign bonds, or only at usurous rates, money in circulation will rapidly decline in value and hyperinflation occurs. (At one point Argentina printed new money so rapidly that she actually ran out of paper on which to print currency. It became a moot point whether the newly issued currency was linked to new debt because no one, other than the central bank, wanted their bonds. Hyperinflation set in.) Zimbabwe, of course, also suffered hyperinflation. In their case, no one wanted their currency. Since their newly created money was not linked to debt with a reasonable credit risk, there was no limitation on how much could be printed.

It seems a key word in your statement I quoted above is the word "bad" to characterize U.S. debt . Is the debt really "bad"? The way that is typically decided is through the market, is it not? I would have to say that so far, according to the market, the U.S. and Japan have not been pushing "bad debt". I am one of the few, however, that believes that the market is often wrong.

Wow things have changed on the site. I have been enjoying the sunshine and rest and by chance happened on this question. Tragic to hear about the porn industry limping along - what will all the failed traders do now with the time on their hands (among other things) I wonder?

So my answer would be: I am not using bad in the judgement sense but in the "never to be paid back sense" AKA worthless debt. (It is bad in the sense that it can not be paid back.) So my question is in this thread, the debt owed is 60n Trillion (it is actually higher but lets use that number) and the Money supply is much less. Hmm, how is that possible. How can we have more debt than money? Some of that debt must be worthless since money is the "store of value". How can a country have more debt than money or value?

I think that the innovation that Gentle Ben introduced was swaps. He created a big pot of money in the FED and swapped it for worthless bonds that appeared on bank balance sheets. The reasoning would be that the deflationary hole (2008) of worthless bonds could be held as a book entry forever and would not circulate. The banks would be bailed out and the world economic system would be saved. Doesn't look like it is working though.

In the US each state has representation. Money kept in the US will eventually make some states poor and others wealthy. But in time the poor states can exert pressure in government to change things and restore the balance. Their vote is the same as everyone else in the US. When debt is forced on other countries in return for goods or services they shipped on good faith into the US, there is no representation or ability to address imbalances in world goods trading. In 1971 when the great balancer of world trade was ditched an explosion of worthless debt appeared. Nowadays they trade debt in offsetting fashion but as we saw in 2008, that is not immune to problems either. Lowering the interest rate delays the inevitable but it will come. Even Ben knows that today.

 

[StarDust9182]

This is precisely right and common sense should dictate this reality to all of us - including those in Congress who keep spending us down the toilet decade after painful decade. Just look at what happened in 2006. The Current Account was cut by more than half before 2010.

Oh, sure. They will say that it was because our economy was slowing down. But, will they actually take a look at the data:

The contraction in the economy did stall growth in the Current Account, no doubt. However, we could have had the same result with a growing Middle Class, the return of Middle Income Jobs, less borrowing from China/Germany/Japan and more inherent (homegrown) buying here in the U.S. instead of the overflow of buying we do from foreign sources.

We've got the script entirely backwards and at some point we need to start asking whether or not someone is doing this on purpose and to what end.

Yes it is on purpose IMO (whether is actually 10 guys with funny hats meeting annually or just the way of the human organizing principles is immaterial) and the end is the same one as on the rocky and bullwinkle show - control of the vorld. There is a problem with wealth, beyond a certain point it can't increase happiness. Status takes over as a leader (Maslow) and ego dominates over others. It doesn't fill the void but it is fun to pretend. In 50 years, rich and poor we all share the same fate so their is no gain as the preacher said, only vanity. This has been the problem for 10000 years as we looked for someone reliable to store our community wealth in an honest fashion looking out for the community over lining their own pockets. Wo-Mankind has not yet solved that problem and are still working on it the same way - religion, banking, CEOs, bilderberg meetings, media control, political correctness, human rights abuses, global climate change, (compare the different theme in Ukraine and Israel wars for example), leadership courses, etc.

Jackson won a fight and then they won in 1913 and immediately financed world wars to take control, putting Jackson's face on the money as a sarcastic dig IMO. That war has never ended, only the theatre and combatants changed. Now they fight their own people since the "middle class dream" has ended and their true purpose comes to light IMO. We are still working on the problem of altruistic leadership. The atomic bomb changed things completely for a while. Germany and Japan are still ruled by their conquerors and have lost their gold in trust. NATO, IMF, UN, - if you had all the money in the world, what could you buy for it? Well THEY did buy it!

 

[FireWalker]

Varying degrees of understanding in this discussion.

A class-action lawsuit against the Fed would bring this discussion to the TV and newspapers. All Americans are plaintiffs, they just don't know it yet. How did $17 trillion in debt occur? Why does every infant automatically owe $60,000 just for being born?