An easy explanation of why the Fiat capitalistic system is flawed

[mOgliE]

OK I m not exactly a fan of capitalism but here is a demonstration not against the capitalism in itself but more the fiat/bank aspect. I m not promoting socialism here ^^
Just awareness on how screwed we are.

It's a very simple explanation but that doesn't mean it's not perfectly true ^^
Two things get us in the shit:
First, fiat system isn't a closed one. It means money is added in the system on a regular basis. You'll tell me, it's rather logical because the amount of wealth in the world always increase so the amount of money has to increase too. Fine.
But the second problem is that money is printed by government (or an institution depending on the government,depends of the country) and given out to the banks, and it's banks jobs to spread the money. Problem is: how do they do that? By giving out loans.
And they do that since the beginning, it means banks earn interests on absolutely every penny on earth! Which means you gotta print more money to pay them,money printed by government and then... loaned by the banks!

It seems just a closed system where banks get everything in the end. Basically, with fiat, we're screwed.

[Balthazar]

Because it indebts everybody, including bankers and government themselves.

[mOgliE]

Because it indebts everybody, including bankers and government themselves.

It doesn't really indebted bankers though. They take loans at 0.1% and then lend it back at 2%...

[nihilnegativum]

they have a little credit quotient pyramide scheme going on, while hyping the beneficial effects of inflation on economies

[TECSHARE]

fiat does not = capitalism

Your title is misleading. Sure sounds like you are promoting socialism by criticizing a flawed banking model not exclusive to capitalism, and then calling it capitalism.

[BADecker]

Doug Casey Warns:

While President Obama took credit this weekend for saving the world economy from a global depression and stock markets are hovering around all-time highs, not everyone is convinced that central bank policy and government involvement in financial markets has stabilized the system.

...

You’ve got to remember that all of these governments and central banks all around the world have driven interest rates not just to zero, but to negative levels in some cases… and they are simultaneously printing up trillions of currency units. And even while they are desperately doing that the economy is falling apart in lots of different ways.

…They’ve created a super-bubble in bonds, a bubble in stocks, and meanwhile commodities have collapsed and are below production costs in many cases.

…The economy is going to be very, very bad… It’s the next stage of what I call the Greater Depression.

https://www.youtube.com/watch?v=da7fBFneMH0


Read more at http://www.shtfplan.com/headline-news/doug-casey-warns-its-the-next-stage-of-the-greater-depression-the-economy-is-going-to-be-very-very-bad_04252016.

[shinep]

'Greater Depression' would be good chance for the crypto currencies to gain a foot hold.

[mOgliE]

fiat does not = capitalism

Your title is misleading. Sure sounds like you are promoting socialism by criticizing a flawed banking model not exclusive to capitalism, and then calling it capitalism.

No it's not. You're only misinterpreting it.
My title is refering to fiat capitalistic system, simply because it's the current system and that's the one I'm criticizing. I've got no idea what a fiat socialism/communism/whateverism would do as it doesn't exist.

But you see it as a criticize of capitalism, which is not here.

[mOgliE]

they have a little credit quotient pyramide scheme going on, while hyping the beneficial effects of inflation on economies

That's exactly the idea!
What's horrible is that noone is understanding it. They don't understand they pay interests on everything.
They'll say "I don't have any loan"
Well maybe you don't, but where does your money comes from? YOur salary? well it comes from a company, which takes money from clients, which earn money through salar... etc... Until at a moment or another someone gets the money from the bank as a loan.

[nihilnegativum]

 It has to be kept in mind that monetary infation does not necessarily mean price inflation, to establish this relationship banks are needed to distribute the new money supply, and so if successful they produce the price inflation. However even if the banks are successful in this, there are questions about whether this is at all desirable and whether this is going to be possible at all in the near future. I think that the mechanisms of monetary policies will become very inefficient with new monetary tech.
 
If you want to have an economy of export, you devalue your currency, so its cheaper for the buyers with another currency, then over time population's income is adjusted to inflation. The difference between the time of inflation and the adjustment is the actual cost of inflation, the decrease in the buying power of the population. This is the invisible tax paid to the banks and the rich, a tax that actually hurts the part of the population that has the most % of its value stored as currency, mostly the poor that only have their wage, and the middle class with some savings. Why would the rich care if the buying power of whatever money they are holding is decreased, when their businessess, products, land etc. all increase in value disproportionally. Another thing is that is supposed to be beneficial is that loans become cheaper, this has two effects, the people who have a lot of capital can enlarge it even further by taking cheap loans, their loans are profitable, they create capital, and the poor go deeper and deeper in debt because its so cheap and they spend capital. Both mechanisms lead to a greater inequality of money distribution in the long run, and then people wonder why the gap is growing and why our economies are failing. No wonder, its been our money policy for half a century.

[BADecker]

they have a little credit quotient pyramide scheme going on, while hyping the beneficial effects of inflation on economies

That's exactly the idea!
What's horrible is that noone is understanding it. They don't understand they pay interests on everything.
They'll say "I don't have any loan"
Well maybe you don't, but where does your money comes from? YOur salary? well it comes from a company, which takes money from clients, which earn money through salar... etc... Until at a moment or another someone gets the money from the bank as a loan.

Yes!

This shows that the whole of capitalism and fiat currency as they stand today, are a great big Ponzi. They will crash, eventually. But when they do, the big bankers will have set themselves up with property in ways that don't depend on fiat or capitalism.

The rest of us will simply have lost some or all of our property.

[Moloch2]

Thats why we need to feel the bernie. he will stop ether ipo scam and make elite pay their taxes like they did 1960

[coinzat]

that is why fiat is always in a continuous
inflating. they want people to spend their
money and do not save it so the
economy can grow up more and they
print more. an unending circle !

[mOgliE]

It has to be kept in mind that monetary infation does not necessarily mean price inflation, to establish this relationship banks are needed to distribute the new money supply, and so if successful they produce the price inflation. However even if the banks are successful in this, there are questions about whether this is at all desirable and whether this is going to be possible at all in the near future. I think that the mechanisms of monetary policies will become very inefficient with new monetary tech.
 
If you want to have an economy of export, you devalue your currency, so its cheaper for the buyers with another currency, then over time population's income is adjusted to inflation. The difference between the time of inflation and the adjustment is the actual cost of inflation, the decrease in the buying power of the population. This is the invisible tax paid to the banks and the rich, a tax that actually hurts the part of the population that has the most % of its value stored as currency, mostly the poor that only have their wage, and the middle class with some savings. Why would the rich care if the buying power of whatever money they are holding is decreased, when their businessess, products, land etc. all increase in value disproportionally. Another thing is that is supposed to be beneficial is that loans become cheaper, this has two effects, the people who have a lot of capital can enlarge it even further by taking cheap loans, their loans are profitable, they create capital, and the poor go deeper and deeper in debt because its so cheap and they spend capital. Both mechanisms lead to a greater inequality of money distribution in the long run, and then people wonder why the gap is growing and why our economies are failing. No wonder, its been our money policy for half a century.

Exactly. And what people don't understand is that this tax is by far more important that whatever amount they pay to the state.
Worst, this tax is not only paid by them! But also by their government ><

[nihilnegativum]

Exactly. And what people don't understand is that this tax is by far more important that whatever amount they pay to the state.
Worst, this tax is not only paid by them! But also by their government ><

Yes, in this context it becomes increasingly hard to speak of 'goverments' at all. When they have so little sovreignity left and accept foreign monetary policies for a cheap bribe, or whats even worse by the popular demand of the people themselves, pumped by the some trivial ideological division.

[TECSHARE]

fiat does not = capitalism

Your title is misleading. Sure sounds like you are promoting socialism by criticizing a flawed banking model not exclusive to capitalism, and then calling it capitalism.

No it's not. You're only misinterpreting it.
My title is refering to fiat capitalistic system, simply because it's the current system and that's the one I'm criticizing. I've got no idea what a fiat socialism/communism/whateverism would do as it doesn't exist.

But you see it as a criticize of capitalism, which is not here.

I don't know what would give me that impression, perhaps it is because it is in the title. As far as no communist/socialist states using fiat, I would be surprised if you could show me any communist/socialist state that doesn't/didn't use fiat currency. Perhaps address the real problem, fiat and fractional reserve lending, and leave your communist/socialist bias out of it.

[samlanhan1]

I can agree with you that our current fiat system is flawed. But I think that we can build off the basics ( single currency exchange vs. bartering exclusively) so we can have a sense of standards .

[mOgliE]

fiat does not = capitalism

Your title is misleading. Sure sounds like you are promoting socialism by criticizing a flawed banking model not exclusive to capitalism, and then calling it capitalism.

No it's not. You're only misinterpreting it.
My title is refering to fiat capitalistic system, simply because it's the current system and that's the one I'm criticizing. I've got no idea what a fiat socialism/communism/whateverism would do as it doesn't exist.

But you see it as a criticize of capitalism, which is not here.

I don't know what would give me that impression, perhaps it is because it is in the title. As far as no communist/socialist states using fiat, I would be surprised if you could show me any communist/socialist state that doesn't/didn't use fiat currency. Perhaps address the real problem, fiat and fractional reserve lending, and leave your communist/socialist bias out of it.

Give me the example of a socialist or communist country with fiat!
The only country which is really communist/socialist is Cuba. And they don't use fiat. Well at least they didn't.

[TECSHARE]

fiat does not = capitalism

Your title is misleading. Sure sounds like you are promoting socialism by criticizing a flawed banking model not exclusive to capitalism, and then calling it capitalism.

No it's not. You're only misinterpreting it.
My title is refering to fiat capitalistic system, simply because it's the current system and that's the one I'm criticizing. I've got no idea what a fiat socialism/communism/whateverism would do as it doesn't exist.

But you see it as a criticize of capitalism, which is not here.

I don't know what would give me that impression, perhaps it is because it is in the title. As far as no communist/socialist states using fiat, I would be surprised if you could show me any communist/socialist state that doesn't/didn't use fiat currency. Perhaps address the real problem, fiat and fractional reserve lending, and leave your communist/socialist bias out of it.

Give me the example of a socialist or communist country with fiat!
The only country which is really communist/socialist is Cuba. And they don't use fiat. Well at least they didn't.

No no no, no more of that tu quoque logical fallacy bullshit from you.
https://yourlogicalfallacyis.com/tu-quoque

YOU made a claim, and I posed a challenge to YOU to prove it. You don't get to just turn the question around on me and tell me to prove it for you because you are too ignorant and lazy. Now try again comrade.

[BTC-Joe]

OK I m not exactly a fan of capitalism but here is a demonstration not against the capitalism in itself but more the fiat/bank aspect. I m not promoting socialism here ^^

Capitalism is an economic paradigm that allows for private ownership of resources, businesses, means of production and any other facet of the economy. Any individual person has an opportunity to thrive under such a system. The USA is the only "success story" in human history, and competitive free market capitalism is what enabled it to have continued success.

It's a very simple explanation but that doesn't mean it's not perfectly true ^^
Two things get us in the shit:
First, fiat system isn't a closed one. It means money is added in the system on a regular basis. You'll tell me, it's rather logical because the amount of wealth in the world always increase so the amount of money has to increase too. Fine.

Monetary policy has nothing to do with capitalism. The government, not private individuals or entities, regulate the currency supply. There is a legitimate need to add or remove currency to maintain price stability as the population grows. Let's say the USA only made 100 million dollars available. We now have over 300 million people living here. Do you see a problem with that? Inflation would be rampant and the currency value would be volatile.

As populations grow, demand for resources grow. This creates the demand on commodities, which are then supplied by companies of industry. A stable currency is required for a smooth-running economy.

But the second problem is that money is printed by government (or an institution depending on the government,depends of the country) and given out to the banks, and it's banks jobs to spread the money. Problem is: how do they do that? By giving out loans.

Not quite - you could get a job and earn money, use the money you earned to start a business and further increase your wealth. This thing called work coupled with an ability to provide a product or service of value to other people does not require a loan.

And they do that since the beginning, it means banks earn interests on absolutely every penny on earth! Which means you gotta print more money to pay them,money printed by government and then... loaned by the banks!

Banks are private entities, although they are highly integrated with the government and therefore partially socialized, hence the problems they introduce into society. You cannot really create your own bank as you would be required to comply with endless pages of regulatory crap designed to essentially make it illegal for truly private banks to spring up.

During the obama bailouts of 2008-2009, many small, independent, responsible banks that did not slice up and sell bad mortgage debt were forced to accept bail-out money even though they didn't want or need it. The reason for this was to get them under the thumb of the federal government, in addition to creating the false narrative that the dodd-frank bill (aka the economy killer) was necessary to prevent a similar crash from happening again.

It seems just a closed system where banks get everything in the end. Basically, with fiat, we're screwed.

I don't think you really understand how the traditional banking system works or why it has problems. Most of the problems that exist with regard to banking and finance are onerous government regulations that stifle competition and block new ideas from ever gaining ground. Things like the SEC exist to protect the financial industry, not to protect citizens from unscrupulous lenders (we already have laws for theft and fraud).