Dominator4fx
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Having Gold is always a safe bet at any time since the prices of the Gold are appreciating each day and this gives us more opportunities for income.
Having Gold is always a safe bet at any time since the prices of the Gold are appreciating each day and this gives us more opportunities for income.
rsh01
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rsh01
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Quite an interesting article which has relevance to the discussions in this thread...
Hacktivists in the frontline battle for the internet | Technology | guardian.co.uk
Never heard of the Bitcoin before.
Hacktivists in the frontline battle for the internet | Technology | guardian.co.uk
Never heard of the Bitcoin before.
darktone
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Is gold appreciating in value!? Or is the money that gold is priced in decreasing in value!?
darktone
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I heard of it but dont that much about it tbh. As far as im aware its 100% digital and can be created by anyone via mining (solving an algo). Very interesting.
darktone
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The latest from positive money.
How Does Current Banking System Affect YOU?, Ben Dyson at Edinburgh Just Banking 2012 - YouTube
How Does Current Banking System Affect YOU?, Ben Dyson at Edinburgh Just Banking 2012 - YouTube
darktone
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Ive just watched it. Ideal for folks new to the subject imo.
97% Owned - Positive Money Directors Cut - YouTube
97% Owned - Positive Money Directors Cut - YouTube
Last edited:
rsh01
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do you know the sources for his data? normally it would be a footnote on the charts but not in his case.
Last edited:
darktone
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Im sorry i dont
. Am sure they would be happy to give up the sources if you bung them email.montmorencyt2w
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They call security...
montmorencyt2w
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montmorencyt2w
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There has been plenty of economics expertise on display in this thread, and all due respect to those who have it.
I don't claim to have it, but I can apply a modicum of common sense and experience (my own, my parents, and my wider family).
If the gold standard was so great, why did we in Britain have massive unemployment when we were on it, which eventually went away when we came off it?
My parents were children and teenagers in the 1920s and 1930s, and lived in an area where the main employer was shipbuilding. (It had also been mining, but the mines ran out in that period, if not before). After WW1, there was not surprisingly, less need for naval ships, and although other ships were built, my grandfather suffered from long periods of unemployment from time to time. After about 1938, when WW2 was almost certain, he was fully employed, and was never again out of work until he retired, quite late in life.
My Dad almost literally got on his bike and went to London when he was 16, and after that was never, ever out of work until he retired, quite late in life, spending almost all his working life in London or elsewhere in the south.
Although there was high unemployment in the industrial areas (typically in the north) in the 1930s, elsewhere, life could be pretty good. I've seen in documentaries about that period that there was quite a boom in house building in London and the south in those days (the famous "ribbon development", for example), and if you were in secure employment, it wasn't too difficult to put down a deposit on a house, and house prices were pretty stable.
There was a lot of inequality in other words, even among people of the same "class". The more skilled you were, the better your chances, although that didn't always protect you from unemployment. And there were pockets of unemployment in London and the south as well. "Getting on your bike" wouldn't have worked for everyone.
It's interesting to speculate what might have happened had there been no WW2, and even more interesting, had there been no WW1, but there was, so no point in going further with that. Many people agree that the period 1945 to about 1970 was one of the most successful periods economically in Britain, Western Europe, and even more so in the USA.
I think Ducati referred to Bretton Woods as a negative thing (sorry if I misunderstood), but again, a lot of people seem to think it laid down the basis for the prosperity of the western economies in the 50s, 60s, and early 70s. It was a gold standard for the USA, and a quasi gold-standard for most other currencies, although, for example, Britain famously devalued within it a few times.
Another factor that I haven't seen mentioned, was that the pound Sterling had also been a reserve currency. There was such a thing as the Sterling Area, mostly the old Empire and Commonwealth. And Britain was slowly divesting itself (or being forcibly divested of ) its colonial possessions. (this had been one of FDR's ambitions, BTW, to destroy the British Empire, and it was a price that Churchill paid fairly willingly for "lend-lease" in the war; of course, he was half-American...). So anyway, that all going away represented a massive, massive change in Britain's power, influence, and wealth.
Notwithstanding, similar to Barjon, my generation experienced a quality of life far better than that of my parents, and my parents overall quality of life was far better than that of their parents. Sadly, my childrens' generation is now having it tougher than we had it, although their problems are somewhat cushioned by technology. But in the important things like housing, food and fuel costs, and later on, pensions, it's harder for them. We are in a position to help, but that only goes so far.
Is this all down to the money system?
Well, inflation is almost certainly a factor, and even in our apparently prosperous years, the underlying high inflation always bothered me. Even "low" inflation was still pretty high cumulatively, and you can see this is deliberate policy.
In the 50s, 60s and 70s, as Bj says, everyone worried about the balance of payments.
By the 80s and 90s, it was the money supply. Now, seemingly, no one in politics or the Treasury/BoE worries publicly about the money supply, and I wonder why not.
If we could magically return to the gold standard, it might solve some problems, but it would be at great human cost. Recession and unemployment, obviously. People say glibly that this is necessary, and it is the market telling us that these jobs are "useless". hmm...People who say that are usually those from a comfortable background who have never experienced long-term unemployment without the benefit of a welfare system. Or it's people like Sugar, who borrowed £100 from their parents to start a business in a period of sustained high growth, added a bit of sharp practice, got lucky and rich, and put it down to their own genius, and are now lecturing today's youngsters, who face a completely different world.
I tend to regard Ron Paul and his disciples as being on the political right, fans of small government or even of no government. However, if you listen to what Michael Meacher is saying in that video posted earlier, it is interesting that all the things he's describing that went wrong, were bits of regulation that were slowly but surely peeled away, until we had an almost completely unregulated financial market, with results that we all know about. And people think small government will be the answer? I don't see how.
Also, as soon as "President Paul" wanted to wage war, we'd see exactly how long his devotion to sound money would last. Not long, I should imagine.
Both socialism and Schumpeter have been mentioned. Co-incidentally, I came across one of his books the other day, available here online:
http://sergioberumen.files.wordpres...seph-a-capitalism-socialism-and-democracy.pdf
Pretty heavy-going in places, but interesting (the bits I have read - haven't read it all). Now, he wasn't an advocate of socialism; the opposite, if anything, but even he, writing from between 1942 and 1949, thought that capitalism would eventually collapse. As things turned out, communism collapsed first, but this didn't mean that capitalism had "won". It has had plenty of shocks, and its collapse may not happen all at once, but it is certainly in danger.
I don't claim to have it, but I can apply a modicum of common sense and experience (my own, my parents, and my wider family).
If the gold standard was so great, why did we in Britain have massive unemployment when we were on it, which eventually went away when we came off it?
My parents were children and teenagers in the 1920s and 1930s, and lived in an area where the main employer was shipbuilding. (It had also been mining, but the mines ran out in that period, if not before). After WW1, there was not surprisingly, less need for naval ships, and although other ships were built, my grandfather suffered from long periods of unemployment from time to time. After about 1938, when WW2 was almost certain, he was fully employed, and was never again out of work until he retired, quite late in life.
My Dad almost literally got on his bike and went to London when he was 16, and after that was never, ever out of work until he retired, quite late in life, spending almost all his working life in London or elsewhere in the south.
Although there was high unemployment in the industrial areas (typically in the north) in the 1930s, elsewhere, life could be pretty good. I've seen in documentaries about that period that there was quite a boom in house building in London and the south in those days (the famous "ribbon development", for example), and if you were in secure employment, it wasn't too difficult to put down a deposit on a house, and house prices were pretty stable.
There was a lot of inequality in other words, even among people of the same "class". The more skilled you were, the better your chances, although that didn't always protect you from unemployment. And there were pockets of unemployment in London and the south as well. "Getting on your bike" wouldn't have worked for everyone.
It's interesting to speculate what might have happened had there been no WW2, and even more interesting, had there been no WW1, but there was, so no point in going further with that. Many people agree that the period 1945 to about 1970 was one of the most successful periods economically in Britain, Western Europe, and even more so in the USA.
I think Ducati referred to Bretton Woods as a negative thing (sorry if I misunderstood), but again, a lot of people seem to think it laid down the basis for the prosperity of the western economies in the 50s, 60s, and early 70s. It was a gold standard for the USA, and a quasi gold-standard for most other currencies, although, for example, Britain famously devalued within it a few times.
Another factor that I haven't seen mentioned, was that the pound Sterling had also been a reserve currency. There was such a thing as the Sterling Area, mostly the old Empire and Commonwealth. And Britain was slowly divesting itself (or being forcibly divested of ) its colonial possessions. (this had been one of FDR's ambitions, BTW, to destroy the British Empire, and it was a price that Churchill paid fairly willingly for "lend-lease" in the war; of course, he was half-American...). So anyway, that all going away represented a massive, massive change in Britain's power, influence, and wealth.
Notwithstanding, similar to Barjon, my generation experienced a quality of life far better than that of my parents, and my parents overall quality of life was far better than that of their parents. Sadly, my childrens' generation is now having it tougher than we had it, although their problems are somewhat cushioned by technology. But in the important things like housing, food and fuel costs, and later on, pensions, it's harder for them. We are in a position to help, but that only goes so far.
Is this all down to the money system?
Well, inflation is almost certainly a factor, and even in our apparently prosperous years, the underlying high inflation always bothered me. Even "low" inflation was still pretty high cumulatively, and you can see this is deliberate policy.
In the 50s, 60s and 70s, as Bj says, everyone worried about the balance of payments.
By the 80s and 90s, it was the money supply. Now, seemingly, no one in politics or the Treasury/BoE worries publicly about the money supply, and I wonder why not.
If we could magically return to the gold standard, it might solve some problems, but it would be at great human cost. Recession and unemployment, obviously. People say glibly that this is necessary, and it is the market telling us that these jobs are "useless". hmm...People who say that are usually those from a comfortable background who have never experienced long-term unemployment without the benefit of a welfare system. Or it's people like Sugar, who borrowed £100 from their parents to start a business in a period of sustained high growth, added a bit of sharp practice, got lucky and rich, and put it down to their own genius, and are now lecturing today's youngsters, who face a completely different world.
I tend to regard Ron Paul and his disciples as being on the political right, fans of small government or even of no government. However, if you listen to what Michael Meacher is saying in that video posted earlier, it is interesting that all the things he's describing that went wrong, were bits of regulation that were slowly but surely peeled away, until we had an almost completely unregulated financial market, with results that we all know about. And people think small government will be the answer? I don't see how.
Also, as soon as "President Paul" wanted to wage war, we'd see exactly how long his devotion to sound money would last. Not long, I should imagine.
Both socialism and Schumpeter have been mentioned. Co-incidentally, I came across one of his books the other day, available here online:
http://sergioberumen.files.wordpres...seph-a-capitalism-socialism-and-democracy.pdf
Pretty heavy-going in places, but interesting (the bits I have read - haven't read it all). Now, he wasn't an advocate of socialism; the opposite, if anything, but even he, writing from between 1942 and 1949, thought that capitalism would eventually collapse. As things turned out, communism collapsed first, but this didn't mean that capitalism had "won". It has had plenty of shocks, and its collapse may not happen all at once, but it is certainly in danger.
montmorencyt2w
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Interesting video. Apart from other thoughts, it did remind me forcibly of how significantly (probably) the advent of credit cards has been for our debt problems.
The problems described were there all along with traditional bank lending (which until about the 1970s was always rather careful and conservative), but credit cards must have magnified it very quickly.
I suppose that most people are aware of the horrendous rates of interest they are paying (if they don't pay them off each month), but many are probably not fully aware of the even worse effect of compounding on this already usurious rate.
darktone
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Have to admit that ive not thought much about the credit card angle, but now youve said it, makes sense. Easy access to rolling credit + consumer mindset,,,yes.
Epic previous post btw, sincere / unbiased, questioning rather forcing opinion. This thread could do with more of that i think. Thanks.
montmorencyt2w
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Thanks for your comments Darktone. It's a pretty interesting subject, and it's nice to see it covered from a British perspective for a change. I'd seen a load of videos talking about the Fed and the history of US money (and usually a lot of bitching about the Boe ), and I'd often wondered how exactly the modern UK compared.
I've now watched several PositiveMoney videos.
I must admit, it took me a while to realise that the PositiveMoney people, although interested in sound or honest money, were not aiming for a gold standard, like the RonPaulites. In fact they seem reasonably happy with big government, and even trust the MPC to create the new reformed money that they propose. Admittedly they want to make it more democratically accountable, i.e. accountable to Parliament, which sounds like an improvement, until you consider that MPs also like to please voters, so can you really trust them either? Nevertheless they have some good ideas, and even claim at one point to have Mervyn King on their side. (I hope they didn't misinterpret his reply/replies).
I have a few worries though, such as what about money entering or leaving the country from abroad, which is obviously easy nowadays. Surely that must affect the money supply. Are they going to bring back exchange control? (Is that even legal within the EU?).
It's also not clear how interest rates would be determined, and what effect that would have on inflation (which would have a knock on effect on the money supply, presumably). I wonder how often the decision to create (or not) new money would be taken, and how often inflation would be measured, and how indeed would you measure inflation accurately. (Would you include housing costs, for example?).
And I think I heard Ben Dyson say that inflation caused by e.g. the price of oil rising wouldn't count. hmm...
And also, that an inflation rate of 2% might be countenanced. Well, that's still inflation, and after compounding, that's still a lot of inflation. (He did say there was some debate about whether it should be 0% or 2% though).
I'm not sure if this has been posted, although I think that you posted a link to a trailer, Darktone:
New Documentary Reveals the Roots of our Social and Economic Crisis | Positive Money
This is a longer version (I've not watched it yet):
97% Owned - Monetary Reform documentary - YouTube
I came across a this link in a comment on the PositiveMoney site:
http://mises.org/books/mysteryofbanking.pdf
I've only skimmed through bits of it so far, but it looks very informative, although it's quite old now. It is from a US perspective, but he does write about the British system.
See especially the section on the Bank of England and Scottish Free Banking.
But then see the appendix which must have been written later for this edition, and pretty much contradicts the earlier section on Scottish "free" banks. He concludes that they were neither free, or necessarily any better than the English banks of the time. It's good to see both sides of the argument though
I should add that he is in favour of a gold standard, but I've not looked in detail at his reasons, or his particular implementation.
Going back to the present day (or some time in the future): I suppose I would have no objection if the USA wanted to go back to a gold standard (so long as it did not plunge the world into complete depression). We'd then find out (maybe) whether Fort Knox really does contain any US gold, or whether some of the conspiracy theorists are right
As I say, this is an interesting, actually fascinating subject, and I want to learn more.
I doubt if many people do know much about it, but more worryingly, I doubt if many people think that it is important to know about it.
p.s. The example of Argentina came suddenly to mind. They pegged their currency to the USD with disastrous results. I'm not sure if that counts as an attempt at sound money or not. Maybe they would have been better with a gold standard. But maybe they didn't have any gold. There again, if gold is priced in USD, and the USD is floating against gold, would they have been any better off? In fact, come to think of it, would there be any point in any country going "gold" unless the US had already done so? OK, I admit I haven't studied the gold standard very seriously. Maybe I should (if only to counter their arguments ).
Another personal recollection (well, via my Mother). My grandfather, previously mentioned, apparently gave the priest who married him and my grandmother 5 gold sovereigns. I'm not sure to what extent gold sovereigns were in common use at that time (and I've forgotten the year), but anyway, I thought it interesting. He was comparatively well-off, at the time, for a (skilled) working man. From years of overtime in WW1 perhaps.
I
), and I'd often wondered how exactly the modern UK compared.I've now watched several PositiveMoney videos.
I must admit, it took me a while to realise that the PositiveMoney people, although interested in sound or honest money, were not aiming for a gold standard, like the RonPaulites. In fact they seem reasonably happy with big government, and even trust the MPC to create the new reformed money that they propose. Admittedly they want to make it more democratically accountable, i.e. accountable to Parliament, which sounds like an improvement, until you consider that MPs also like to please voters, so can you really trust them either? Nevertheless they have some good ideas, and even claim at one point to have Mervyn King on their side. (I hope they didn't misinterpret his reply/replies).
I have a few worries though, such as what about money entering or leaving the country from abroad, which is obviously easy nowadays. Surely that must affect the money supply. Are they going to bring back exchange control? (Is that even legal within the EU?).
It's also not clear how interest rates would be determined, and what effect that would have on inflation (which would have a knock on effect on the money supply, presumably). I wonder how often the decision to create (or not) new money would be taken, and how often inflation would be measured, and how indeed would you measure inflation accurately. (Would you include housing costs, for example?).
And I think I heard Ben Dyson say that inflation caused by e.g. the price of oil rising wouldn't count. hmm...
And also, that an inflation rate of 2% might be countenanced. Well, that's still inflation, and after compounding, that's still a lot of inflation. (He did say there was some debate about whether it should be 0% or 2% though).
I'm not sure if this has been posted, although I think that you posted a link to a trailer, Darktone:
New Documentary Reveals the Roots of our Social and Economic Crisis | Positive Money
This is a longer version (I've not watched it yet):
97% Owned - Monetary Reform documentary - YouTube
I came across a this link in a comment on the PositiveMoney site:
http://mises.org/books/mysteryofbanking.pdf
I've only skimmed through bits of it so far, but it looks very informative, although it's quite old now. It is from a US perspective, but he does write about the British system.
See especially the section on the Bank of England and Scottish Free Banking.
But then see the appendix which must have been written later for this edition, and pretty much contradicts the earlier section on Scottish "free" banks. He concludes that they were neither free, or necessarily any better than the English banks of the time. It's good to see both sides of the argument though
I should add that he is in favour of a gold standard, but I've not looked in detail at his reasons, or his particular implementation.
Going back to the present day (or some time in the future): I suppose I would have no objection if the USA wanted to go back to a gold standard (so long as it did not plunge the world into complete depression). We'd then find out (maybe) whether Fort Knox really does contain any US gold, or whether some of the conspiracy theorists are right
As I say, this is an interesting, actually fascinating subject, and I want to learn more.
I doubt if many people do know much about it, but more worryingly, I doubt if many people think that it is important to know about it.
p.s. The example of Argentina came suddenly to mind. They pegged their currency to the USD with disastrous results. I'm not sure if that counts as an attempt at sound money or not. Maybe they would have been better with a gold standard. But maybe they didn't have any gold. There again, if gold is priced in USD, and the USD is floating against gold, would they have been any better off? In fact, come to think of it, would there be any point in any country going "gold" unless the US had already done so? OK, I admit I haven't studied the gold standard very seriously. Maybe I should (if only to counter their arguments
). Another personal recollection (well, via my Mother). My grandfather, previously mentioned, apparently gave the priest who married him and my grandmother 5 gold sovereigns. I'm not sure to what extent gold sovereigns were in common use at that time (and I've forgotten the year), but anyway, I thought it interesting. He was comparatively well-off, at the time, for a (skilled) working man. From years of overtime in WW1 perhaps.
I
rsh01
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tzmnetwork
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Fundamental Understanding
One of the most profitable business is war, but unfortunately it is no longer true when the defense department is spending more than its return on investment. For instances, America's defense spending doubled in the same period and that its economy shrunk from 32 to 23 percent of global output. Global military expenditure is about $1.7 trillion annually, and USA is accounting for over 41% of it. Many people might wondering where does all the money comes from? Mostly it is tax money and over $27.7 billion spent a year by consumer on preparing tax and the number of pages in the tax code has increased 16,775% in the past century. This probably sounds not related at all however what you can see here is such a huge spending is possible because a minority is taking from majority (via taxes), indirectly you have the rich creating wealth by taking from the average joe or the poor.
The overall picture here is not judging who is the good guy or vice versa, but what you should notice is the system we are all in, where there's a winner and loser. The problem with such system we are using is there is fear among all the participants, a winner certainly fear he/she might fall back and become a loser in the future, same as rich people worried if they might become poor and having lack of access to necessities and luxury item in their daily life. The key of solving this kind of crisis is actually technology, if you look carefully what really is the thing that creates wealth it is not money at all, instead it is resources. For example, the war I've mentioned in the first paragraph, where the rich trying to get the oil resources while on the other hand, military expense also does consume resource in order to make those weapons/tanks/aircraft, 15,654 square miles used for US bases & military complex, that's more than D.C, Massachusetts & new jersey state combined, then comes along with the tax to fund those war where behind the scenes these complicated tax scheme also does consume resources in order to get the "things" done. Let alone unprecedented amount of human labour, time & money spent on all these indirect consequences & most importantly UNNECESSARY and wasteful activity just for the rich people/oil corporation to get hold of oil in Iraq/afghan. Does it worth it?
If you look from the overall picture, the resources on this earth planet is finite, rich people and big corporation managed to get the oil and resources with any means, but on the other hand activities to acquire these resource is not free either. Earth has only this much resource and we never take account of intelligence and smart way to manage it, whats happening is we are willing to go get something at all cost, ignoring the unforeseen consequences later. For example, going to war may seem quick and easy solution to solve energy crisis, while also making the rich richer, but these wouldn't last long and short term solution usually does not have a good outcome.
One of the most common question the rich claim is the people/consumer is paying for it, there is nothing wrong customer paying for product/services to make businessman rich. That is only part of the picture, because of the system we are in, the other people, usually consumer which have no choice but to find something else to do in order to make a living, once they get paid with their salary, consumer will spent the money on supermarket, etc. to make some businessman rich. Where is the problem in here? For example, i owned 1 of the biggest factory manufacturing food in this town, and i only hire limited amount of people. While the rest of the town population have no choice except find something else to do, banking, advertising, insurance, fishing, other industry, etc etc.. these is obviously not voluntary activities neither people is doing it because of their passion, the problem in here is actually people are forced to take part in unnecessary resource consumption(which is valuable) in order to make a living.(pay me later to buy foods ive produced for them) how long this will be able to go on? resource depletion is well documented here (refer the links at reference). so the important aspect you have to notice here is the rich managed to stay on "top" of majority, but then the rest of the people keep digging beneath of this giant ship to make a living and one day they will dig until the ship sinks and nothing will be left for everyone. The ship im talking about is the earth planet which it doesn't matter if you are rich or poor each of us eventually will be affected. The younger generation of the rich will no longer able to enjoy as much as their parent do and everyone's living standard has been reduced. The government may have heavily promoting the service based sector job, unfortunately it may have not solve the actual problem instead keeps patching the hole which coming from the system.
The Proposal
Many of our daily problems doesn't matter if you are rich or poor it has a lot to do with fear and insecurity. These feeling actually comes from our perception towards others, other than that it has nothing to do with resources or other living things beside human. If you are average joe, you have your worries if your job able to pay stable income or not, if you are businessman, you concern about profit at the end of the year, if you are shareholder of big corporation, you concern about stock prices and how your CEO able to perform. Money and business profit system has dragged & forced everyone to make a choice, each of us trying set a "territory" against our employers or against our clients if you are in business. If you are not doing that, you could have risk of not getting anything and had access to poor life.The opposite could be just the truth, what actually we need is remove those belief and barriers we had on each other, what does the rich people have anything to lose if i ask them to give up everything? this will not work if only certain amount of people agreed to this new economy, it will only work if everyone on earth has acknowledged and proper understanding about it.
By requesting everyone on earth to give up everything they had is all that is. It is that simple, for instance, a rich person have 50 cars and 10 houses. However under the perception from new economy, this is not considered rich or have high standard of living, why the 'rich' person we see today only gets to drive 50 cars and live 10 houses? this is precisely where if we gave up everything and move into this new economy, the rich person today will have virtually unlimited access to numbers of car he/she can drive in the world, live in countless type of houses available everywhere in the world, etc.. The next question usually raised by many people is how is it possible everyone can get everything without paying? One of the important aspect of understanding this type of new economy is where access to needed resource is the solution instead of owning it. With today's available technology and automation, it is already possible we convert global gdp into new 100% automated gdp. This kind of new economy system does not require any human labour in order to produce everything that people needs. Refer the links in the references, to put it simply, this new economy system is also way of life.
reference :
15 Facts About Military Spending That Will Blow Your Mind - Business Insider
20 More Tax Facts That Will Make Your Head Explode - Business Insider
World Military Spending
What a population of 7 billion people means for the planet | Environment | guardian.co.uk
Cookies must be enabled | Herald Sun
ZeitNews
IF U DOUBT about this new proposal, i suggest you understand our current monetary & economy system first :
Understanding Secrets of Money
im about to introduce you something that makes money. money comes from where? its from a large high-tech printer, but who owns the printer? a private printing press company owns these printer. if this is true, werent we all is in danger or possible abuse? this company could have print all the money they want and buy the entire economy, the rest of the people will be forced to work under this company. thats precisely where the central banks comes into the picture, central banks owns this money printing company they decide how much money to be print at a time. without further clarification, we could end up same issue or power abuse again, central bank could buy up entire economy and everyone else is forced to work under central bank. so in some country central banks owns by the government & some central bank is privately owned.
central banks primary function is to manage country's money supply or known as monetary policy. it includes control prices or inflation, act as regulatory for the banking system, interest rate & etc.. if you have got this far, it is important to point out that central banks do not need your money or gold/silver to put in their vault before lending it out to the public through commercial banks. the monetary system we have today is simply unlimited as it is just a number in computer. useful reference : http://www.bankofengland.co.uk/publications/quarterlybulletin/qb0703.pdf (p377 or p405) the idea of unlimited money sounds difficult to comprehend for some people, here is further info : Proof that Banks Create Money | Positive Money
who decides to create money? before we get into that, lets look at how our typical banks operate today. suppose lets say you are employee of a bank, should you lend the money to public or not? if you lend, you will get commission, bonus, you get to keep your job & you will also get promoted. if you dont lend, you wont get anything except get fired. so you see we have situation here bank's employee's survival(buy food, pay bills, shelter, etc) is threaten if they do not lend. back to the question, who decides to create money? as the professor charles goodhart puts it "the supply of money is actually determined primarily by the demand of borrowers to take out loans.." his book info : Where Does Money Come From? (Book) | Positive Money
if you look at macroeconomic subject, central bank's job is also controlling prices stability. central bank can control inflation by increase or reduce money supply in the economy. inflation goes up when central bank print more money to buy government bonds, bills or gov issued notes. in order to lower inflation, central bank sells gov bond in open market, indirectly takes out the cash from the economy. gov create bond papers and sell to central bank because gov needs money, money usually used to pay gov employee, country's infrastructure development & increase economy growth. as the old saying goes, more money supply but limited number of goods and services will devalue the money, thus increase of prices.
one of the most obvious is housing prices, around 90+% of the commercial bank loan is on housing & property. thats why house is so expensive, too much money chasing little goods. banks typically have 2 types of lending, productive and non-productive. productive lending includes actual investment in business or factory that produce goods. non-productive lending includes housing loan & speculating in financial market, which do not increase how much stuff or goods in the economy instead make houses more expensive. suppose you are a bank, why you prefer to lend on property instead of business or factory that produces goods? because business is intangible and if goes bankrupt bank cannot get anything, while if on property loan, banks could still get hold of something if debtors do not make his/her monthly loan payment to bank. thus, only about 8% of commercial bank loan is on business/factory.
indirectly when there is very little business can survive in the economy due to lacks of fund/loans. it affects how many jobs available in the economy. since we allow banks create all our money, this indirectly our money has become debt because banks only give loans. and when you have loans it comes with repayment + interest rate. thus, over the time, money supply will shrinks & we all goes into economy recession. this is what a "privatized money" do, a complete "privatized economy" under the hand of few bankers. when economy is privatized, it happens to control some part of your life too. when recession happens, it affects the government revenue too. how many police or hospital/schools/road maintainence/etc.. can be build, oil subsidy, unemployment benefit, business less profit same as less tax, etc.. thus government also goes into debt by borrowing even more and this is what a national debt is.
reference :
How Money is Made / Created: Ben Dyson Explains the Debt Crisis - YouTube
"Zeitgeist Day" 2012 Los Angeles - "A MAD Economy" by Joe Alexopoulos - YouTube
One of the most profitable business is war, but unfortunately it is no longer true when the defense department is spending more than its return on investment. For instances, America's defense spending doubled in the same period and that its economy shrunk from 32 to 23 percent of global output. Global military expenditure is about $1.7 trillion annually, and USA is accounting for over 41% of it. Many people might wondering where does all the money comes from? Mostly it is tax money and over $27.7 billion spent a year by consumer on preparing tax and the number of pages in the tax code has increased 16,775% in the past century. This probably sounds not related at all however what you can see here is such a huge spending is possible because a minority is taking from majority (via taxes), indirectly you have the rich creating wealth by taking from the average joe or the poor.
The overall picture here is not judging who is the good guy or vice versa, but what you should notice is the system we are all in, where there's a winner and loser. The problem with such system we are using is there is fear among all the participants, a winner certainly fear he/she might fall back and become a loser in the future, same as rich people worried if they might become poor and having lack of access to necessities and luxury item in their daily life. The key of solving this kind of crisis is actually technology, if you look carefully what really is the thing that creates wealth it is not money at all, instead it is resources. For example, the war I've mentioned in the first paragraph, where the rich trying to get the oil resources while on the other hand, military expense also does consume resource in order to make those weapons/tanks/aircraft, 15,654 square miles used for US bases & military complex, that's more than D.C, Massachusetts & new jersey state combined, then comes along with the tax to fund those war where behind the scenes these complicated tax scheme also does consume resources in order to get the "things" done. Let alone unprecedented amount of human labour, time & money spent on all these indirect consequences & most importantly UNNECESSARY and wasteful activity just for the rich people/oil corporation to get hold of oil in Iraq/afghan. Does it worth it?
If you look from the overall picture, the resources on this earth planet is finite, rich people and big corporation managed to get the oil and resources with any means, but on the other hand activities to acquire these resource is not free either. Earth has only this much resource and we never take account of intelligence and smart way to manage it, whats happening is we are willing to go get something at all cost, ignoring the unforeseen consequences later. For example, going to war may seem quick and easy solution to solve energy crisis, while also making the rich richer, but these wouldn't last long and short term solution usually does not have a good outcome.
One of the most common question the rich claim is the people/consumer is paying for it, there is nothing wrong customer paying for product/services to make businessman rich. That is only part of the picture, because of the system we are in, the other people, usually consumer which have no choice but to find something else to do in order to make a living, once they get paid with their salary, consumer will spent the money on supermarket, etc. to make some businessman rich. Where is the problem in here? For example, i owned 1 of the biggest factory manufacturing food in this town, and i only hire limited amount of people. While the rest of the town population have no choice except find something else to do, banking, advertising, insurance, fishing, other industry, etc etc.. these is obviously not voluntary activities neither people is doing it because of their passion, the problem in here is actually people are forced to take part in unnecessary resource consumption(which is valuable) in order to make a living.(pay me later to buy foods ive produced for them) how long this will be able to go on? resource depletion is well documented here (refer the links at reference). so the important aspect you have to notice here is the rich managed to stay on "top" of majority, but then the rest of the people keep digging beneath of this giant ship to make a living and one day they will dig until the ship sinks and nothing will be left for everyone. The ship im talking about is the earth planet which it doesn't matter if you are rich or poor each of us eventually will be affected. The younger generation of the rich will no longer able to enjoy as much as their parent do and everyone's living standard has been reduced. The government may have heavily promoting the service based sector job, unfortunately it may have not solve the actual problem instead keeps patching the hole which coming from the system.
The Proposal
Many of our daily problems doesn't matter if you are rich or poor it has a lot to do with fear and insecurity. These feeling actually comes from our perception towards others, other than that it has nothing to do with resources or other living things beside human. If you are average joe, you have your worries if your job able to pay stable income or not, if you are businessman, you concern about profit at the end of the year, if you are shareholder of big corporation, you concern about stock prices and how your CEO able to perform. Money and business profit system has dragged & forced everyone to make a choice, each of us trying set a "territory" against our employers or against our clients if you are in business. If you are not doing that, you could have risk of not getting anything and had access to poor life.The opposite could be just the truth, what actually we need is remove those belief and barriers we had on each other, what does the rich people have anything to lose if i ask them to give up everything? this will not work if only certain amount of people agreed to this new economy, it will only work if everyone on earth has acknowledged and proper understanding about it.
By requesting everyone on earth to give up everything they had is all that is. It is that simple, for instance, a rich person have 50 cars and 10 houses. However under the perception from new economy, this is not considered rich or have high standard of living, why the 'rich' person we see today only gets to drive 50 cars and live 10 houses? this is precisely where if we gave up everything and move into this new economy, the rich person today will have virtually unlimited access to numbers of car he/she can drive in the world, live in countless type of houses available everywhere in the world, etc.. The next question usually raised by many people is how is it possible everyone can get everything without paying? One of the important aspect of understanding this type of new economy is where access to needed resource is the solution instead of owning it. With today's available technology and automation, it is already possible we convert global gdp into new 100% automated gdp. This kind of new economy system does not require any human labour in order to produce everything that people needs. Refer the links in the references, to put it simply, this new economy system is also way of life.
reference :
15 Facts About Military Spending That Will Blow Your Mind - Business Insider
20 More Tax Facts That Will Make Your Head Explode - Business Insider
World Military Spending
What a population of 7 billion people means for the planet | Environment | guardian.co.uk
Cookies must be enabled | Herald Sun
ZeitNews
IF U DOUBT about this new proposal, i suggest you understand our current monetary & economy system first :
Understanding Secrets of Money
im about to introduce you something that makes money. money comes from where? its from a large high-tech printer, but who owns the printer? a private printing press company owns these printer. if this is true, werent we all is in danger or possible abuse? this company could have print all the money they want and buy the entire economy, the rest of the people will be forced to work under this company. thats precisely where the central banks comes into the picture, central banks owns this money printing company they decide how much money to be print at a time. without further clarification, we could end up same issue or power abuse again, central bank could buy up entire economy and everyone else is forced to work under central bank. so in some country central banks owns by the government & some central bank is privately owned.
central banks primary function is to manage country's money supply or known as monetary policy. it includes control prices or inflation, act as regulatory for the banking system, interest rate & etc.. if you have got this far, it is important to point out that central banks do not need your money or gold/silver to put in their vault before lending it out to the public through commercial banks. the monetary system we have today is simply unlimited as it is just a number in computer. useful reference : http://www.bankofengland.co.uk/publications/quarterlybulletin/qb0703.pdf (p377 or p405) the idea of unlimited money sounds difficult to comprehend for some people, here is further info : Proof that Banks Create Money | Positive Money
who decides to create money? before we get into that, lets look at how our typical banks operate today. suppose lets say you are employee of a bank, should you lend the money to public or not? if you lend, you will get commission, bonus, you get to keep your job & you will also get promoted. if you dont lend, you wont get anything except get fired. so you see we have situation here bank's employee's survival(buy food, pay bills, shelter, etc) is threaten if they do not lend. back to the question, who decides to create money? as the professor charles goodhart puts it "the supply of money is actually determined primarily by the demand of borrowers to take out loans.." his book info : Where Does Money Come From? (Book) | Positive Money
if you look at macroeconomic subject, central bank's job is also controlling prices stability. central bank can control inflation by increase or reduce money supply in the economy. inflation goes up when central bank print more money to buy government bonds, bills or gov issued notes. in order to lower inflation, central bank sells gov bond in open market, indirectly takes out the cash from the economy. gov create bond papers and sell to central bank because gov needs money, money usually used to pay gov employee, country's infrastructure development & increase economy growth. as the old saying goes, more money supply but limited number of goods and services will devalue the money, thus increase of prices.
one of the most obvious is housing prices, around 90+% of the commercial bank loan is on housing & property. thats why house is so expensive, too much money chasing little goods. banks typically have 2 types of lending, productive and non-productive. productive lending includes actual investment in business or factory that produce goods. non-productive lending includes housing loan & speculating in financial market, which do not increase how much stuff or goods in the economy instead make houses more expensive. suppose you are a bank, why you prefer to lend on property instead of business or factory that produces goods? because business is intangible and if goes bankrupt bank cannot get anything, while if on property loan, banks could still get hold of something if debtors do not make his/her monthly loan payment to bank. thus, only about 8% of commercial bank loan is on business/factory.
indirectly when there is very little business can survive in the economy due to lacks of fund/loans. it affects how many jobs available in the economy. since we allow banks create all our money, this indirectly our money has become debt because banks only give loans. and when you have loans it comes with repayment + interest rate. thus, over the time, money supply will shrinks & we all goes into economy recession. this is what a "privatized money" do, a complete "privatized economy" under the hand of few bankers. when economy is privatized, it happens to control some part of your life too. when recession happens, it affects the government revenue too. how many police or hospital/schools/road maintainence/etc.. can be build, oil subsidy, unemployment benefit, business less profit same as less tax, etc.. thus government also goes into debt by borrowing even more and this is what a national debt is.
reference :
How Money is Made / Created: Ben Dyson Explains the Debt Crisis - YouTube
"Zeitgeist Day" 2012 Los Angeles - "A MAD Economy" by Joe Alexopoulos - YouTube
darktone
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Thanks for your comments Darktone. It's a pretty interesting subject, and it's nice to see it covered from a British perspective for a change. I'd seen a load of videos talking about the Fed and the history of US money (and usually a lot of bitching about the Boe
Youre welcome
I've now watched several PositiveMoney videos.
I must admit, it took me a while to realise that the PositiveMoney people, although interested in sound or honest money, were not aiming for a gold standard, like the RonPaulites. In fact they seem reasonably happy with big government, and even trust the MPC to create the new reformed money that they propose. Admittedly they want to make it more democratically accountable, i.e. accountable to Parliament, which sounds like an improvement, until you consider that MPs also like to please voters, so can you really trust them either? Nevertheless they have some good ideas, and even claim at one point to have Mervyn King on their side. (I hope they didn't misinterpret his reply/replies).
Yep, Positive Money are in the monetary reform group which argues for a debt free fiat currency (which is very different to the debt based unit we have now.).
All as far as im aware, PM want an elected commitee (poss MPC) to have the creation power, certainly not MPs for the reasons you suggest. They would have to be transparent and accountable to all. For me personally id like to see a public education program of some sort put out, taught in schools also. Its no secret that Mervyn King is an open critic of the current system and is sympathetic to the non debt backed view.
I have a few worries though, such as what about money entering or leaving the country from abroad, which is obviously easy nowadays. Surely that must affect the money supply. Are they going to bring back exchange control? (Is that even legal within the EU?).
Yep i know what you mean. Isnt that a concern with any system tho? Havent given it much thought tbh but id imagine as the currency would be elastic, it can be expanded / contracted as needed.
It's also not clear how interest rates would be determined, and what effect that would have on inflation (which would have a knock on effect on the money supply, presumably). I wonder how often the decision to create (or not) new money would be taken, and how often inflation would be measured, and how indeed would you measure inflation accurately. (Would you include housing costs, for example?).
And I think I heard Ben Dyson say that inflation caused by e.g. the price of oil rising wouldn't count. hmm...
And also, that an inflation rate of 2% might be countenanced. Well, that's still inflation, and after compounding, that's still a lot of inflation. (He did say there was some debate about whether it should be 0% or 2% though).
I think interest rates would be determined by the market. How do you see the money supply being effected by interest rates btw?
I ve no idea how often it should be monitored / adjusted tbh but i think everything should be included in the inflation number, possibly £ per capita also.
"That oil wouldnt count", hmm. Maybe he means as oil etc is priced in $ and the £ would float against the $ the oil price relative to the strength of the £ would take care of itself. Not sure :|.
Re inflation. 0% - 2%, for sure any compounding rate is bad and i guess it depends on how you view things. The way i see it atm, a change in price can result from a S/D change or an increase / decrease in the money supply, in both cases it would a result of rather than a cause of. Would be interesting to hear views on how to conclude how much money should be created, base it on population / prices / combination or something else?Should it be be based on money that can be accessed by the public, or total amount? Also, i think it would be easier to justify a little inflation if we were getting something for it. New infrastructure / productive jobs / business investment / health / education etc etc. Interesting stuff for debate.
I'm not sure if this has been posted, although I think that you posted a link to a trailer, Darktone:
New Documentary Reveals the Roots of our Social and Economic Crisis | Positive Money
This is a longer version (I've not watched it yet):
97% Owned - Monetary Reform documentary - YouTube
I came across a this link in a comment on the PositiveMoney site:
http://mises.org/books/mysteryofbanking.pdf
I've only skimmed through bits of it so far, but it looks very informative, although it's quite old now. It is from a US perspective, but he does write about the British system.
See especially the section on the Bank of England and Scottish Free Banking.
But then see the appendix which must have been written later for this edition, and pretty much contradicts the earlier section on Scottish "free" banks. He concludes that they were neither free, or necessarily any better than the English banks of the time. It's good to see both sides of the argument though
I should add that he is in favour of a gold standard, but I've not looked in detail at his reasons, or his particular implementation.
Ive posted so many vids and such ive no idea if im guilty
Going back to the present day (or some time in the future): I suppose I would have no objection if the USA wanted to go back to a gold standard (so long as it did not plunge the world into complete depression). We'd then find out (maybe) whether Fort Knox really does contain any US gold, or whether some of the conspiracy theorists are right
Yeah im not completely against a gold standard per say, the problems i see are that its deflationary in nature, and its subject to hoarding, in the worst case by large holders of gold. (see milton friedmans work on the great depression). Re Fort Knox, would be a day of days when the doors finally swing open, but i cant see that happening until all the eggs are in the basket, even its only overnight! erhmm!
As I say, this is an interesting, actually fascinating subject, and I want to learn more.
I doubt if many people do know much about it, but more worryingly, I doubt if many people think that it is important to know about it.
Agreed!..The most depressing part at one point for me was the attitude my friends took, in that they listened, sort of got it but. "well thats just the way is" "what can we do about it" "Its just your opinion!" (that one really pizzes me off!
p.s. The example of Argentina came suddenly to mind. They pegged their currency to the USD with disastrous results. I'm not sure if that counts as an attempt at sound money or not. Maybe they would have been better with a gold standard. But maybe they didn't have any gold. There again, if gold is priced in USD, and the USD is floating against gold, would they have been any better off? In fact, come to think of it, would there be any point in any country going "gold" unless the US had already done so? OK, I admit I haven't studied the gold standard very seriously. Maybe I should (if only to counter their arguments
I havent done much on Argentina. One point though, if say we were to change our system. How would we fair next to the rest of the world? would we get taken the cleaners by the speculators or would the world say "hang on a minute, were getting mugged! We want some of that!" Is a big question for me.
Another personal recollection (well, via my Mother). My grandfather, previously mentioned, apparently gave the priest who married him and my grandmother 5 gold sovereigns. I'm not sure to what extent gold sovereigns were in common use at that time (and I've forgotten the year), but anyway, I thought it interesting. He was comparatively well-off, at the time, for a (skilled) working man. From years of overtime in WW1 perhaps.
Lucky priest!
I
darktone
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Thanks for the epic post. Agree with pretty much with everything youve said apart from that CBs have much control over the money supply. As said before the supply is mainly contolled by a willingness to borrow. But not mentioned was the banks willingness (or not) to lend. Both are almost equally important points imho.
Re your comments on alternative society etc. Maybe outside the scope of this thread but its the BIG picture isnt it
. Ive had a look at Chris Martensons work, excellent! Also Jacque Frescos work in the Venus project. Id certainly be up for a society like this, not sure most of the rest of the world would tho Hopefully we can get there one day.
