Interesting Document on the Fed

Clare_Guy

I found this document and it makes for interesting reading.

On another thread someone asked "Where does money come from?"
This goes someway to answer that question...

http://www.devvy.com/pdf/2006_October/Patman_Primer_on_Money.pdf

STEVO B

Clare_Guy wrote: »

I found this document and it makes for interesting reading.

On another thread someone asked "Where does money come from?"
This goes someway to answer that question...

http://www.devvy.com/pdf/2006_October/Patman_Primer_on_Money.pdf

Yeah that question was asked.

Our resident expert 'Ibid' couldnt give an answer. He was last seen patting the dust of several books in trinity, evidently to no apparent success.

Time Magazine

STEVO B, I did give an answer. It used to be issued in accordance with gold reserves, etc. Today it's essentially issued by central banks in accordance with how much economic activity warrants it. Yes, it is issued "out of thin air", but only if you think I give a barber money for "nothing".

What do I actully give barbers money for? Their time. What do I provide for €9? My time. Again, "nothing" when you compare it to gold, whose value is determined by human valuation, too...

Kernel

Ibid wrote: »

STEVO B, I did give an answer. It used to be issued in accordance with gold reserves, etc. Today it's essentially issued by central banks in accordance with how much economic activity warrants it. Yes, it is issued "out of thin air", but only if you think I give a barber money for "nothing".

What do I actully give barbers money for? Their time. What do I provide for €9? My time. Again, "nothing" when you compare it to gold, whose value is determined by human valuation, too...

Seems like a handy number. I make worthless paper, with which I can buy peoples time and labour with. Kinda like evolved slavery!

Once I'm the one printing the paper of course.

Gordon

You didn't read Ibids post.

Kernel wrote: »

Seems like a handy number. I make worthless paper

It's not worthless, it's worth money!

Why don't you try to bring back the barter system if you are fed up with money?

Time Magazine

Kernel wrote: »

Seems like a handy number. I make worthless paper, with which I can buy peoples time and labour with. Kinda like evolved slavery!

Once I'm the one printing the paper of course.

Weimar Republic, 1923


Zimbabwe, today


If you think people are stupid, don't react to devalued money and work for nothing: keep printing. Alternatively, try to learn the first thing about this:



Do you think everybody is twice as rich if you double the amount of money in a game of Monopoly... or would you just expect prices to double?

Here's that "slavery" thing graphed:


Oh and before casey comes in and says "yeah but debt's been rising exponentially too": debt must be a fraction of total wealth (seeing as debt is credit to somebody else, which they provided you with an economic good for) and when you take the exponent of fraction...

And really now, I'm done.

PoshParrot

Ibid wrote: »

Weimar Republic, 1923


Zimbabwe, today

Both planned events. You need to look at causes and effects. Just like a manufactured crisis resulted in the creation of the federal reserve in 1913 (as noted in congressional records), so these events have been manufactured to cause instability. You will find the Nazi party came to power as they promised the people a solution to the 1923 crisis. Just like the UN/world bank will "rescue" Zimbabwe. (For rescue, read enslave and rob natural resources.)

Ibid wrote: »

If you think people are stupid, don't react to devalued money and work for nothing: keep printing. Alternatively, try to learn the first thing about this:

People will work for a long time before anything is done. You are looking at things from a dramatic viewpoint. If real wages are reduced at even 1 or 2% exponentially, you will not get revolt for at least 15 years, however disposable income will drop dramatically.

Ibid wrote: »

Do you think everybody is twice as rich if you double the amount of money in a game of Monopoly... or would you just expect prices to double?

It takes money to make money. Therefore the haves will benefit and the have nots will get further into a spiral of debt. See modern day Ireland for an example.

Ibid wrote: »

Here's that "slavery" thing graphed:


Oh and before casey comes in and says "yeah but debt's been rising exponentially too": debt must be a fraction of total wealth (seeing as debt is credit to somebody else, which they provided you with an economic good for) and when you take the exponent of fraction...

What a load of rubbish. Real GDP?

Standard of living is based on GDP per worker and purchasing power. For example taken from your graph, 1990 GDP $50,000 1890 $13,000. However what did a house cost in 1890 compared with 1990? I can guarantee that it was less than 5% of 1990 prices.

And another thing, you have to love these government inflation figures, you know the ones that leave out energy and food prices.

Ibid wrote: »

Oh and before casey comes in and says "yeah but debt's been rising exponentially too": debt must be a fraction of total wealth (seeing as debt is credit to somebody else, which they provided you with an economic good for) and when you take the exponent of fraction...

Here is a startling piece of information, federal reserve notes/euro notes are debt. You fail to have a basic understanding of the purpose of money.

Money is a claim on the labour of another. When you get paid, the money is useless, can you eat it?. Money only has its usefulness when used in a second transaction, when a person buys what they require.

Money is a medium of exchange, in other words. This basic concept seems to have been overlooked.

Forget all this which you have been taught, you are caught up in a typical trap. That trap is based on arrogance. Economics is a "science" created to fool the ordinary people, to keep things out of their grasp.

Money was first introduced to facilitate trade. Until the last few hundred speculation for accumulation was unheard of. How can in invest €100 and next year have €200 based on a rising stock? I know they typical responses, so save the tatter. The whole stock market is nothing more than a pyramid scheme.

Commerce is essentially a very simple process.

Clare_Guy

Ibid wrote: »

What do I actully give barbers money for? Their time. What do I provide for €9? My time. Again, "nothing" when you compare it to gold, whose value is determined by human valuation, too...

gold's value is largely determined by supply, it's a finite supply, whereas paper money is produced out of thin air...

Clare_Guy

Ibid wrote: »

debt must be a fraction of total wealth (seeing as debt is credit to somebody else, which they provided you with an economic good for) and when you take the exponent of fraction...

what is wealth? apart from "cash in hand" it's values placed upon assets and these values are largely fluid notional amounts determined by the market.

when money is created from debt, i.e. commercial banks borrow money from central banks at interest. this is the fundamental source of inflation which in turn requires the creation/borrowing of more money which in turn fuels more inflation.

do you think this is a sustainable system/society?

watch "money masters"...

http://video.google.com/videoplay?docid=-515319560256183936

oscarBravo

OK, we've established that there are some people who have a problem with the concept of "money", and who wish to revert to a system of exchange that doesn't involve promissory notes of any kind.

What should I barter in exchange for a house?

Clare_Guy

The problem is not with "money" it's with the people who control the money.

why can't money be produced by governments directly? why do we have "national debt"?

Watch "money master"...

oscarBravo

Do you have an understanding of economics? Not intended as a jibe, but a genuine question. You haven't responded to Ibid's post, for example.

Clare_Guy

it has nothing, NOTHING to do with economics.

why can't governments produce money themselves?

watch money master, read the document at the beginning of the thread then you might understand why some people have misgivings about the current system...

bonkey

Clare_Guy wrote: »

do you think this is a sustainable system/society?

It has lasted until now. Ergo, it has proven at least a basis of sustainability.

Where are the signs that this sustainability is about to fail? There have been critics saying that failure is imminent pretty-much since the whole fractional reserve system came into being. To date, they've been uniformly incorrect. What reason do we have to believe that they're about to be right?

If you repeat something long enough, odds are that you'll eventually be right. If you say "today is Tuesday" every day, you'll be right one day in seven. If you say "today is the first day of the new millenium", you'll be right one day in roughly 365,250 (assuming we only use one clock).

So seriously...given that the imminent end of the fractional reserve system has been doom-said for at least as long as the Fed has been around (95 years)....what reason do we have to believe that they're finally right?

Note - for those who want to leap on the good ol' widening gap between the super-rich and the rest of the world as being a sign of imminent collapse....you must first show that this gap is a result of the system you're decrying and show that we're reacing a tipping point.

bonkey

Clare_Guy wrote: »

why can't governments produce money themselves?

Its called seperation of powers. Its the same reason, for example, that judges typically don't get to make laws and rule on their enforcement.

PoshParrot

bonkey wrote: »

It has lasted until now. Ergo, it has proven at least a basis of sustainability.

Where are the signs that this sustainability is about to fail?

I appear to have had my post deleted from green issues. Here is the truth behind sustainable development:

http://video.google.com/videoplay?docid=1610497431597560497&q=sustainable+development&total=1824&start=0&num=10&so=0&type=search&plindex=7

PoshParrot

bonkey wrote: »

If you repeat something long enough, odds are that you'll eventually be right. If you say "today is Tuesday" every day, you'll be right one day in seven. If you say "today is the first day of the new millenium", you'll be right one day in roughly 365,250 (assuming we only use one clock).

.

Thats the thing, your and your friend Oscar are both firmly in the system.

I know our Freemasonic brothers date everything A.L, after Lucifer.

I could not care less what day of the week it is, never mind what year.

oscarBravo

Long shot, I know, but is there the remotest danger that one of the accounts you've signed up will ever contribute anything intelligent to a discussion on this site?

I mean, seriously: why do you bother?

Clare_Guy

bonkey wrote: »

It has lasted until now. Ergo, it has proven at least a basis of sustainability.

Where are the signs that this sustainability is about to fail? There have been critics saying that failure is imminent pretty-much since the whole fractional reserve system came into being. To date, they've been uniformly incorrect. What reason do we have to believe that they're about to be right?

If you repeat something long enough, odds are that you'll eventually be right. If you say "today is Tuesday" every day, you'll be right one day in seven. If you say "today is the first day of the new millenium", you'll be right one day in roughly 365,250 (assuming we only use one clock).

So seriously...given that the imminent end of the fractional reserve system has been doom-said for at least as long as the Fed has been around (95 years)....what reason do we have to believe that they're finally right?

Note - for those who want to leap on the good ol' widening gap between the super-rich and the rest of the world as being a sign of imminent collapse....you must first show that this gap is a result of the system you're decrying and show that we're reacing a tipping point.

Listen, i'm only going to reply to you once because i'm not interested in getting into a pointless, time-wasting debate with a person who's only interested in shouting down people.

Did you read my post? Can you not see the fundamental problem with the current central banking system?

MONEY IS CREATED OUT OF THIN AIR THROUGH DEBT! THIS DEBT DRIVES INFLATION REQUIRING THE PRODUCING OF MORE MONEY WHICH IN TURN CAUSES MORE INFLATION!

My question was asking how can that be sustainable? Not whether it has been sustained up until now or that it's downfall was imminent...

Your post "proving sustainability" is a pointless addition to this thread, you obviously can't grasp what is being questioned here, or worse, you are deliberately trying to disrupt the debate...

Trolling.
Saying something which is designed not to provoke debate but anger or annoyance for the purpose of laughing at people. Something we know a bit about.

Off-topic stuff.
If a thread is about say, the Luas then it will not end up going on about the Racism in the Irish education system. If you want the debate to divert to the Racism in the Irish education, then start a new thread.

i'm reporting your post.

PoshParrot

oscarBravo wrote: »

Long shot, I know, but is there the remotest danger that one of the accounts you've signed up will ever contribute anything intelligent to a discussion on this site?

I mean, seriously: why do you bother?

What? You seem to view yourself as the big enforcer, shouting others down.

humanji

He's at least giving the Lizardmen conspirators time to regroup. I kind of miss them now.

Casey wrote:

I know our Freemasonic brothers date everything A.L, after Lucifer.

I know it's pointless to ask for proof, but I hold out hope that one day it'll be provided, so do you have any?

Casey wrote:

I could not care less what day of the week it is, never mind what year.

So what? No one cares how you view the week. Bonkey used an analogy, one which seems to have flown over your head. Read it again, the point is very clear.

PoshParrot

humanji wrote: »

He's at least giving the Lizardmen conspirators time to regroup. I kind of miss them now.

There is no such things as aliens/lizard men. Merely advanced technology which has been hidden from the public.

humanji

Clare_Guy wrote: »

My question was asking how can that be sustainable? Not whether it has been sustained up until now or that it's downfall was imminent...

Now, maybe I'm just reading your question wrong, but doesn't pointing out that the system hs be sustained up until now mean that the system is sutainable? Or are you asking the mechanics of how is has been sustained?

and in fairness, Bonkey is neither trolling by that post, or even going off-topic. It's his opinion on the matter. Because you don't agree with it doesn't make it trolling in the same way as he can't see your post as trolling. Same coin, different sides.

humanji

That was a reference to old posters who came here claiming lizards ruled the world. Proabbly before your time(s).

Clare_Guy

humanji wrote: »

Now, maybe I'm just reading your question wrong, but doesn't pointing out that the system hs be sustained up until now mean that the system is sutainable? Or are you asking the mechanics of how is has been sustained?

yeah you read it wrong, maybe you should read things properly before you stick your nose in?

humanji wrote: »

and in fairness, Bonkey is neither trolling by that post, or even going off-topic. It's his opinion on the matter. Because you don't agree with it doesn't make it trolling in the same way as he can't see your post as trolling. Same coin, different sides.

do you know what sustainable means?

is the current system of reliance on fossil fuels sustainable. by your logic the fact that it has been "sustained" up to now means it is...

why bother with all this recycling rubbish!?!

bonkey

Clare_Guy wrote: »

is the current system of reliance on fossil fuels sustainable. by your logic the fact that it has been "sustained" up to now means it is...

No, it means that we should assume its sustainable until we can identify the reasons why it is not so, thus determining the limits of sustainability.

With fossil fuels, we can identify how they are created, thus establishing that they are not replenished. From there, we can identify our rates of consumption, and a rough estimate of how much of hte stuff is where and how much it will cost to get at it, and so on. Once we have enough of this information, we can roughtly determine the limits of sustainability.

Of course, instead of doing these things, we can just appeal to common sense and say that "of course oil will run out...eventually". The problem here is that we can't do any better than saying "eventually". Oil could run out right now as you're reading this...or it could last for another 10,000 years. Indeed, there are some who claim oil is created inside the earth and is replenished. They argue that oil is indefinitely sustainable (until the destruction of the planet, at least).

It is only through establishing the limits of sustainability that we can meaningfully determine a timeframe.

You maintain that the fractional reserve system is unsustainable. Unless you're making a vague claim that it must, someday, eventually fail (somewhere indeterminate between one second from now and (say) the end of human civilisation) then the onus on someone claiming unsustainability is to establish the limits of sustainability and show why this is of concern.

If the system isn't sustainable beyond the next 1,000 years....I'm not too worried, frankly, no more than I'm too concerned about the fusion reaction in the sun being ultimately unsustainable. If its going to fail in the next 100....then its worth looking at. If its going to fail any day now...then we seriously need to pay attention.

But while you shout and complain that someone has dared to ask you to meaningfully establish this limit you claim exists, you're not going to convince many people of anything other than that you don't know the answer.

humanji

Well you didn't really explain what you meant, did you? If you took the time out to explain it instead of getting all defensive and insulting people then maybe it'd be a start, but you don't really want that do you?

dr.quirky

bonkey wrote: »

If you say "today is Tuesday" every day, you'll be right one day in seven. If you say "today is the first day of the new millenium", you'll be right one day in roughly 365,250 (assuming we only use one clock).

haha. love it!! its an old polish proverb , " even a clock that does not work is right twice a day "

Clare_Guy

bonkey wrote: »

No, it means that we should assume its sustainable until we can identify the reasons why it is not so, thus determining the limits of sustainability.

Firstly, the question on fossil fuels was rhetorical...

Look up! that thing floating over your head is my point..

With fossil fuels, we can identify how they are created, thus establishing that they are not replenished. From there, we can identify our rates of consumption, and a rough estimate of how much of hte stuff is where and how much it will cost to get at it, and so on. Once we have enough of this information, we can roughtly determine the limits of sustainability.

So you think money based on debt is sustainable?
I'm gonna try this 1 more time, then you're on your own...

Governments borrow money from Cental Banks at interest, this is the fundamental source of inflation which requires the production of more money which in turn fuels more inflation and so it goes on ad infinitum...

you don't need to be an economics professor to see this is UNSUSTAINABLE!!!

Of course, instead of doing these things, we can just appeal to common sense and say that "of course oil will run out...eventually". The problem here is that we can't do any better than saying "eventually". Oil could run out right now as you're reading this...or it could last for another 10,000 years. Indeed, there are some who claim oil is created inside the earth and is replenished. They argue that oil is indefinitely sustainable (until the destruction of the planet, at least).

I said fossil fuels... another point sailing over your head...
Anyway, Nobody, NOBODY knows how much oil is left, MY POINT was the environmental issue is the main reason dependance on fossil fuels is unsustainable, and if you agree that the damage to the environment IS the main reason fossil fuels are unsustainable then your explanation is pointless!

It is only through establishing the limits of sustainability that we can meaningfully determine a timeframe.

sustainability is not a product of time...

You maintain that the fractional reserve system is unsustainable. Unless you're making a vague claim that it must, someday, eventually fail (somewhere indeterminate between one second from now and (say) the end of human civilisation) then the onus on someone claiming unsustainability is to establish the limits of sustainability and show why this is of concern.

If the system isn't sustainable beyond the next 1,000 years....I'm not too worried, frankly, no more than I'm too concerned about the fusion reaction in the sun being ultimately unsustainable. If its going to fail in the next 100....then its worth looking at. If its going to fail any day now...then we seriously need to pay attention.

I never said it was going to fail, you're putting words in my mouth!

Do you think a self inflating system is sustainable? Can you not see the outcome?

Inflation effects every aspect of yours, mine and everybody's lives, it directly influences how much money you have in your pocket, how much tax you pay, how much your house is worth!!!!

The system means that everything has to increase in price constantly!
Do you think this is the preferable way to exist? The sustainable way?

But while you shout and complain that someone has dared to ask you to meaningfully establish this limit you claim exists, you're not going to convince many people of anything other than that you don't know the answer.

Shout? Whatever!!!

Show me where you meaningfully "ASKED" me to "ESTABLISH THIS LIMIT" seeing as i never claimed that i thought the system was about to fail...?

You spend so much time looking for an arguement and trying to look clever you completely miss the points...

Clare_Guy

humanji wrote: »

Well you didn't really explain what you meant, did you? If you took the time out to explain it instead of getting all defensive and insulting people then maybe it'd be a start, but you don't really want that do you?

?????

I believe i made my point properly, if you or your friend can't get it, it's hardly my fault!

if you actually read my post(s), then perhaps you could see what i meant.

Where did i insult anyone?

bonkey

Clare_Guy wrote: »

I'm gonna try this 1 more time, then you're on your own...

Governments borrow money from Cental Banks at interest, this is the fundamental source of inflation which requires the production of more money which in turn fuels more inflation and so it goes on ad infinitum...

you don't need to be an economics professor to see this is UNSUSTAINABLE!!!

Nor do you need to be a professor of economics and history to see that this allegedly-unsustainable system has been sustained for at least 95 years, and shows no signs today of being worse off then it was at the start.

You can keep ignoring that reality all you like, and keep insisting that it must be unsustainable, but all you're doing is the equivalent of setting out the starting-conditions, skipping the proof, and declaring the answer with a QED.

I said fossil fuels... another point sailing over your head...

You appear to be mistaking disagreement for lack of comprehension. You seem to mistake disagreement for something else quite often.

Anyway, Nobody, NOBODY knows how much oil is left, MY POINT was the environmental issue is the main reason dependance on fossil fuels is unsustainable, and if you agree that the damage to the environment IS the main reason fossil fuels are unsustainable then your explanation is pointless!

Fine...lets look at that reason and ignore the question of availability.

We have determined the costs of our past and current fossil-fuel utilisation, and can meaningfully show where that will take us. We can model what will happen if we continue our current rate of pollution through the use of fossil fuels. We could theoretically reduce our usage to a level which would be envorinmentally sustainable...at which point the question of remaining resources would again take precedence.

In all cases, its the same thing. We know there is a problem with our fossil-fuel usage because we can model the past, current and future scenarios and can show that although we're still standing today, we cannot continue indefinitely.

It is - again - exactly what I'm asking you to do. Like fossil fuel usage, the Fed and the fractional reserve system have been functioning to date without a meltdown. If you want to support the claim that its unsustainable then just like with fossil fuel (whether it be environmental damage or simple availability), you need to be able to show that the system must break down moving forward.

But rather than do that, you just insist that people are missing the point. We're not missing the point...we're missing the reason to believe the point. So we ask for it...

sustainability is not a product of time...

Sustainability has no meaning except as a function of time.

I never said it was going to fail, you're putting words in my mouth!

What are you suggesting happens when the system can no longer be sustained, if not that it will fail?

Do you think a self inflating system is sustainable?

That depends. The system in question is self-inflating to reflect the introduction of new wealth. Should the introduction of wealth ever cease, the system cannot continue inflating. However, the system can stop inflating at that point...there is no requirement that it must continue inflating.

Inflation effects every aspect of yours, mine and everybody's lives, it directly influences how much money you have in your pocket, how much tax you pay, how much your house is worth!!!!

It also determines the pay-rise that I get every year, as well as every other way that I accumulate wealth. As long as I can accumulate faster than I spend, I gain...and that remains true with our without inflation. What inflation really does is give me an impetus to spend or invest, rather than to hoard.

The system means that everything has to increase in price constantly!

Salaries also increase.

Do you think this is the preferable way to exist?

That would depend on whether my salary keeps line with, exceeds, or falls short of inflation. Then again, in a non-inflationary system, the same would be true...it would depend on whether my salary went up, down, or stayed the same.

Show me where you meaningfully "ASKED" me to "ESTABLISH THIS LIMIT" seeing as i never claimed that i thought the system was about to fail...?

I asked you in point 3. You now seem to be saying that I'm wrong to say "unsustainable" means "must fail". I've clarified in a later post that if that "must fail" is (for example) 1000 in the future, I'm not overly worried. If its in my lifetime, I am concerned.

So tell me...if you don't like the term "fail"....How much longer do you believe the system can be sustained for?

Shout? Whatever!!!

So all those CAPS and exclamation marks are you being calm and reasonable? OK.

You spend so much time looking for an arguement and trying to look clever you completely miss the points...

And again, you mistake disagreement for something else.