As I said before, I don't understand your example of BMW lending cars, so let's keep it simple and proceed now from bitcoins (apart from gold). FRB is irrelevant here, and to make things even simpler, let's assume there are no reserve requirements at all (a good assumption since there is no Central Bank to begin with). Could the banks then create bitcoins out of the thin air just like they are said to do with fiat?
No they can't create bit coins. But they can still create credit money But the credit money created by today's banks is the same fiat that is emitted by the Central Bank. And do you know why?  Haha we're back to this again? Thought experiment: if Central Bank suddenly stopped printing money, would the money supply still increase? Or would it remained capped? Thats basically the argument we're having Back to what? Now you seem to be trying to avoid cornering at all means. Banks that create money through credit are a Central Bank's proxies. And if the Central Bank would somehow want to stop for some fancy reason its currency from circulation, no bank would be able to create money in the form of this currency "out of the thin air". I think I made it pretty evident. Central Bank money printing is a metaphor, credit money is just another way of emitting money into circulation by a Central Bank through its proxies (though there are other ways as well). You are only talking about commercial banking. Man why don't you read what I posted about shadow banking and see if you still come to the same conclusion. Otherwise just agree to disagree. Stick w your neoclassical view Why do you send me somewhere to read something? Couldn't you explain your point yourself without outside references? Did I ever ask you in my posts to go read anything besides just my posts? I can explain in layman terms everything that I talk about since I understand what I write. Can you say the same about yourself? Hmmn, I tried to explain it in layman's terms but you kept saying you don't get it. I thought something common like car finance you would understand but apparently not. There are non-commercial banks where credit money is being created. In fact before the 2008 GFC more money was from this shadow bank sector than commercial bank sector. Like other neoclassicals, you are missing half the picture. That's why their models don't work |
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Its losing its novelty. Such a pain to use
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How many of you guys actually spend bitcoins for transactions? Sounds like all you guys care about is the price
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As I said before, I don't understand your example of BMW lending cars, so let's keep it simple and proceed now from bitcoins (apart from gold). FRB is irrelevant here, and to make things even simpler, let's assume there are no reserve requirements at all (a good assumption since there is no Central Bank to begin with). Could the banks then create bitcoins out of the thin air just like they are said to do with fiat?
No they can't create bit coins. But they can still create credit money But the credit money created by today's banks is the same fiat that is emitted by the Central Bank. And do you know why? Haha we're back to this again? Thought experiment: if Central Bank suddenly stopped printing money, would the money supply still increase? Or would it remained capped? Thats basically the argument we're having Back to what? Now you seem to be trying to avoid cornering at all means. Banks that create money through credit are a Central Bank's proxies. And if the Central Bank would somehow want to stop for some fancy reason its currency from circulation, no bank would be able to create money in the form of this currency "out of the thin air". I think I made it pretty evident. Central Bank money printing is a metaphor, credit money is just another way of emitting money into circulation by a Central Bank through its proxies (though there are other ways as well). You are only talking about commercial banking. Man why don't you read what I posted about shadow banking and see if you still come to the same conclusion. Otherwise just agree to disagree. Stick w your neoclassical view |
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Wishing the demise of a country in crisis so your investment makes money. That's class  |
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Funny how I criticized this Molyneux guy few months ago and everyone was offended. Now skepticism towards this bitcoin stops war theory? LOL |
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As I said before, I don't understand your example of BMW lending cars, so let's keep it simple and proceed now from bitcoins (apart from gold). FRB is irrelevant here, and to make things even simpler, let's assume there are no reserve requirements at all (a good assumption since there is no Central Bank to begin with). Could the banks then create bitcoins out of the thin air just like they are said to do with fiat?
No they can't create bit coins. But they can still create credit money But the credit money created by today's banks is the same fiat that is emitted by the Central Bank. And do you know why? Haha we're back to this again? Thought experiment: if Central Bank suddenly stopped printing money, would the money supply still increase? Or would it remained capped? Thats basically the argument we're having |
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Car finance is just an example of where a bank can create credit w/o deposits. I just picked that because people are familiar with it. You go to BMW to lease a car. BMWFS creates a loan to itself out of thin air. BMW buys the car then rents the car to you. Then They pack these leases together as an asset backed security and these papers are used as money. No deposits required
Why should BMW buy you a car if they can produce it for you? In this example BMW serves as a central bank. I still don't understand the essence of your example. They produce the cars but they are using it as asset to create credit. Dont ask me why they do. Its what they do. They do this because not many people have 60K cash to buy their cars The credit is the money. In modern economies half the money is credit. Why is this so hard to understand? Not just cars but all over the finance sector I don't in the least deny this. But you seem to be missing my point. There are only two ways a bank can create money out of the thin air. In the first case if it works as a central bank proxy (as it happens when people say that banks create money out of nothing), or it is a central bank itself. It becomes pretty evident if you take an example with no central bank. Could banks create bitcoins out of thin air? No, they could only issue "paper" bitcoins. Also, there is nothing modern or new in this "Modern Monetary Theory". Who said anything about new? I said my view of money comes from MMT. As opposed to neoclassical, Austrian, or other. I'm not missing your point. You just have a neoclassical view of money and you are glossing over the shadow bank industry. You are arguing the view of neoclassicism and I'm arguing the view of MMT Ok imagine if we revert back to a gold standard system. Banks could still make loans using FRB but they are required to have some reserves as deposits due to regulations. But instead of going back in time let's say we just replace the modern system w gold standard. BMWFS can still keep financing loans using their cars as assets. When you finance a car from BMW they create a loan. When that car is paid off the loan is taken off their balance sheet the interest payments remain in the supply as an monetary expansion. They can also create asset backed securities on these and use these as liquid money. You see how this has nothing to do w Central Banks or commercial / deposit banks? If you look at the events leading up to 2008 GFC. This was what was happening. People like Yellen is aware of this. The issue is how to regulate this shadow bank money. Nobody knows how to deal with it As I said before, I don't understand your example of BMW lending cars, so let's keep it simple and proceed now from bitcoins (apart from gold). FRB is irrelevant here, and to make things even simpler, let's assume there are no reserve requirements at all (a good assumption since there is no Central Bank to begin with). Could the banks then create bitcoins out of the thin air just like they are said to do with fiat? No they can't create bit coins. But they can still create credit money |
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Car finance is just an example of where a bank can create credit w/o deposits. I just picked that because people are familiar with it. You go to BMW to lease a car. BMWFS creates a loan to itself out of thin air. BMW buys the car then rents the car to you. Then They pack these leases together as an asset backed security and these papers are used as money. No deposits required
Why should BMW buy you a car if they can produce it for you? In this example BMW serves as a central bank. I still don't understand the essence of your example. They produce the cars but they are using it as asset to create credit. Dont ask me why they do. Its what they do. They do this because not many people have 60K cash to buy their cars The credit is the money. In modern economies half the money is credit. Why is this so hard to understand? Not just cars but all over the finance sector I don't in the least deny this. But you seem to be missing my point. There are only two ways a bank can create money out of the thin air. In the first case if it works as a central bank proxy (as it happens when people say that banks create money out of nothing), or it is a central bank itself. It becomes pretty evident if you take an example with no central bank. Could banks create bitcoins out of thin air? No, they could only issue "paper" bitcoins. Also, there is nothing modern or new in this "Modern Monetary Theory". Who said anything about new? I said my view of money comes from MMT. As opposed to neoclassical, Austrian, or other. I'm not missing your point. You just have a neoclassical view of money and you are glossing over the shadow bank industry. You are arguing the view of neoclassicism and I'm arguing the view of MMT Ok imagine if we revert back to a gold standard system. Banks could still make loans using FRB but they are required to have some reserves as deposits due to regulations. But instead of going back in time let's say we just replace the modern system w gold standard. BMWFS can still keep financing loans using their cars as assets. When you finance a car from BMW they create a loan. When that car is paid off the loan is taken off their balance sheet the interest payments remain in the supply as an monetary expansion. They can also create asset backed securities on these and use these as liquid money. You see how this has nothing to do w Central Banks or commercial / deposit banks? If you look at the events leading up to 2008 GFC. This was what was happening. People like Yellen is aware of this. The issue is how to regulate this shadow bank money. Nobody knows how to deal with it |
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Car finance is just an example of where a bank can create credit w/o deposits. I just picked that because people are familiar with it. You go to BMW to lease a car. BMWFS creates a loan to itself out of thin air. BMW buys the car then rents the car to you. Then They pack these leases together as an asset backed security and these papers are used as money. No deposits required
Why should BMW buy you a car if they can produce it for you? In this example BMW serves as a central bank. I still don't understand the essence of your example. They produce the cars but they are using it as asset to create credit. Dont ask me why they do. Its what they do. They do this because not many people have 60K cash to buy their cars The credit is the money. In modern economies half the money is credit. Why is this so hard to understand? Not just cars but all over the finance sector |
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I actually like Peter Josephs analysis of capitalism. But I think RBE is a utopian pie in the sky that'll never happen
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Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.
You know, it's REALLY difficult to do FRB with Bitcoin, since you are REALLY relying on having more people funneling in Bitcoins. And guess what happens when some-one wants to withdraw? Either you start funneling Bitcoins out of other's accounts, and they're left with the IOUs. And what happens when they want to withdraw, etc. It's possible, but difficult. That's why wallets were made, so people can be their own bank. And not have to go through the bureaucracy that comes with banks. And they can't be left with IOUs, ever. Either a Bitcoin is there or it's not. If you can do FRB w gold you can do it w bitcoins. The difference is if people have wallets then they dont need to keep their deposits in a bank. But loans would still exist and credit money would still exist. Banks dont really need deposit accounts these days to create loans. For example if you lease a car, the leasing bank creates credit without any deposit accounts To do this (that is create credit without a deposit), banks need a governing body called a central bank which works behind them actually creating new money on behalf of a lending bank. Without a CB, banks could only issue their own "private" money. Now guess what happens if this money is Bitcoin (that is there is no central bank). I just showed example where credit is created w out Central Bank. Most if not all car companies has financial services. If they didn't youd have to go to commercial bank which then is connected to the Central Bank. But surely BMWFS dont have deposit accounts. You can't create credit in national currency (emitted by a central bank under whatever name) without the central bank. I don't understand how car companies are related to all of this. Because 50% of money exist as credit in shadow banking. Too lazy to post a chart. But its on the Fed Reserve website. Someone said its difficult to do FRB w bitcoin bc reserves. I said it isn't. The point about car companies is to illustrate a bank that creates credit w/o deposit accounts or reserves. They create credit using assets (cars) My view of money comes from Modern Monetary Theory so if a little hard to understand if you don't know the theory. You are correct that base money comes from Central Bank. BTW, I think Central Banks are necessary but also their policies are ineffective in crisis My point is that bitcoiners mistake bitcoin as a solution when its not. Bitcoin is based on a 20th century understanding of banking not modern banking There is no such economic theory as "Modern Monetary Theory". What goes under this name, are just a few assertions, one of them being that the banks can create credit without having deposits prior to. But this has long been known before and refers primarily to accounting rules in banks. To make things simple, just think that the deposits are already there in the Central Bank (since it can emit any required amount of money). And don't point to Federal Reserve, if you talk about creating money without a central bank, since Fed IS a central bank. And I still don't understand your analogy with cars. Care to expand more on this more? No what im trying to get you to do is expand what you think is money. To understand the financialized economy you have to grasp credit money and shadow banking Read this about shadow banks: http://www.stlouisfed.org/publications/re/articles/?id=2165http://www.newyorkfed.org/research/staff_reports/sr458.htmlCar finance is just an example of where a bank can create credit w/o deposits. I just picked that because people are familiar with it. You go to BMW to lease a car. BMWFS creates a loan to itself out of thin air. BMW buys the car then rents the car to you. Then They pack these leases together as an asset backed security and these papers are used as money. No deposits required Any securitized instrument can also be used as money. Residential Mortgage Backed Securities are an example. Theres other things like repos, money market mutual funds, asset backed commercial paper, etc.. |
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This is a golden opportunity to put dollars into bitcoins, then wait dollar rebounded back to transfer back
No opposite. When dollar is cheap and bitcoin is expensive you buy dollars and sell bitcoins. Then do the reverse when dollar is expensive and bitcoin is cheap. Basic buy low sell / high theory |
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Why do you draw an upward channel when the trend looks downward?
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Not even tax deductible. Just a gift. LOL |
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Article says $1.5M -- dollars not bitcoins. Thats also sales not profits. Commission on air tickets is like 5%
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Hedge funds are unregulated so they don't have to disclose anything. Good luck finding any dirt on them This Daniel Masters guy used to head energy trading at JP Morgan. His specialty was oil. Seems like JPM bought physical oil and hedged by selling oil futures. I was kind of surprised they took delivery of physical oil! He left cause JP Morgan closed down that division Hard to say what his strategy is. He probably won't tell you unless you drop mucho duckets in his fund Haha. I found out his wife is Blythe Masters. She's the one who created the 'credit default swap' that everyone used and contributed to 2008 GFC. Very smart people, but also epitome of so called 'banksters' that bitcoiners love to hate. I would think that with the fact that the blockchain offers some transparency, we would be able at some point to see how many coins they are holding? It would be horrible if they indeed were just selling coins that they really don't have. Can't say if they engage in naked short selling. That's pretty risky. Here's an article where he talks about his other fund http://m.futuresmag.com/2010/04/01/global-advisors-the-best-of-both-worlds |
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Hedge funds are unregulated so they don't have to disclose anything. Good luck finding any dirt on them This Daniel Masters guy used to head energy trading at JP Morgan. His specialty was oil. Seems like JPM bought physical oil and hedged by selling oil futures. I was kind of surprised they took delivery of physical oil! He left cause JP Morgan closed down that division Hard to say what his strategy is. He probably won't tell you unless you drop mucho duckets in his fund Haha. I found out his wife is Blythe Masters. She's the one who created the 'credit default swap' that everyone used and contributed to 2008 GFC. Very smart people, but also epitome of so called 'banksters' that bitcoiners love to hate. |
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