What happens if consumer debt > M1 money supply?
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say what?
the $1,000,000 condo on Palm Beach bought with sub prime money is all of a sudden bid at $800,000
that will change some points of view since most of the pikers in this country view a pile of sticks and sheet rock as savings....
try to pay your light bill with a 4 x 8 sheet of plywood....report back
Excellent point daddyeaux.
However you are taking the micro view and looking at one condo in Palm and obviously it has magnified it's importance in your mind.
The Banks on the other hand take the macro view and subtract total mortgages from total assessed market value throughout the country.
The balance, commonly referred to as 'Owners Equity' is the part that the banks do not own and which they wish to possess.
And so they dream up very creative means by which they can extract this wealth from you and so far they are doing rather well.
Now, most people look at things, especially big big things from the bottom up.
This brave new global world is essentially 'top down'
If people cannot adopt a 'top down' approach then they will be dog tucker, or should I say 'a banker's lunch'.
The American dream never ever existed anymore than the expression 'live your dreams' was a truism.
They are both oxymorons since you dream when you are asleep, be it in your bed or on your feet.
f9 reporting backing back
regards
I do not think anything will happen until investments and loans will be withdrawn from us. After that we might look like Germany prior to WWII. Although I highly doubt that outcome. I believe everything will be fine, it always turns out to be fine right?
Quote from rateesquad:
I do not think anything will happen until investments and loans will be withdrawn from us. After that we might look like Germany prior to WWII. Although I highly doubt that outcome. I believe everything will be fine, it always turns out to be fine right?
That is my belief as well rateesquad.
The whole system is man made, and therefore fixable by man.
If you can wrap your head around the entire planet upon which we live, it is a zero sum game. Well give or take the odd meteorite.
regards
f9
look...
the ultimate laboratory for all of this is when you pull up to the gas pump and have to pull out a fist full of money to pay for something that will burn up in 150 miles...
so what if your house is worth 20% more this year over last, you're getting chewed alive by dollar devaluation and false appreciation which can vanish into the bowels of a banker's mind.........
your savings are being confiscated by poor central banking and unlimited money creation..........
the ultimate laboratory for all of this is when you pull up to the gas pump and have to pull out a fist full of money to pay for something that will burn up in 150 miles...
so what if your house is worth 20% more this year over last, you're getting chewed alive by dollar devaluation and false appreciation which can vanish into the bowels of a banker's mind.........
your savings are being confiscated by poor central banking and unlimited money creation..........
The banks can always print more money in case of massive debt. But that could lead to chronic inflation or hyperinflation.
Real Estate, long term, is a good investment in countries with high inflation.
In hyperinflation, there's nothing that can save you. What's really interesting is that during the german hyperinflation the smart money built factories, because they represented the best protection. Material things were favored. If you can also make your investment on debt, perfect.
Also pretty interesting and I certainly didn't know and related to this thread, the man who built GM William C Durant LOST GM to bankers, they seized it because of too much debt. He then bought it back though.
Real Estate, long term, is a good investment in countries with high inflation.
In hyperinflation, there's nothing that can save you. What's really interesting is that during the german hyperinflation the smart money built factories, because they represented the best protection. Material things were favored. If you can also make your investment on debt, perfect.
Also pretty interesting and I certainly didn't know and related to this thread, the man who built GM William C Durant LOST GM to bankers, they seized it because of too much debt. He then bought it back though.
Capitalist at its core works on the principle of trade, two parties can mutually benefit from trade because of competitive advantages in their area of specialty. Capitalist is a creator of wealth, I don't believe it's a zero-sum game, even with all the poor countries that serve us right now.
Also I read around, sure there's books like The World is Flat but I get the feeling these "poor countries" hate America's guts. They relish in "stealing" a job from an american. That's not the right mentality for anyone to have, both sides of the fence need to stop thinking that in order to enjoy a high quality of life you need to take away from the other person.
I suppose that having more debt than money supply is just a consequence of fractional reserve banking. I still don't quite understand how fractional reserve debt can be paid off without increasing the money supply.
For example if an economy has $100,000 and there is $500,000 in debt, then it is impossible to pay off without the money supply increasing to $500,000.... Is this correct?
For example if an economy has $100,000 and there is $500,000 in debt, then it is impossible to pay off without the money supply increasing to $500,000.... Is this correct?