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Author Topic: Junk Money Party will go on for 3 years  (Read 5356 times)
Fizzgig
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January 01, 2012, 10:54:58 PM
 #21

Quote from: pusle
Fiat money itself is not the problem, it's the way it is created ...as Debt.

A non debt fiat system would be much better in my opinion, or perhaps a Hybrid.
Let's say the ruling party decided how much money to print and spend directly to purchase labour etc...

So give the politicians the power to create fiat money and spend it directly? How is that different from taxation? oh I know, it's easier.

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January 02, 2012, 12:32:12 PM
 #22

Quote from: pusle
Fiat money itself is not the problem, it's the way it is created ...as Debt.

A non debt fiat system would be much better in my opinion, or perhaps a Hybrid.
Let's say the ruling party decided how much money to print and spend directly to purchase labour etc...

So give the politicians the power to create fiat money and spend it directly? How is that different from taxation? oh I know, it's easier.

It would be a form of taxation, of course, as value of currency drops due to inflation. It is, however, very different from creating money by borrowing at interest from the banks.
 

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January 02, 2012, 12:52:56 PM
 #23


Exactly, loaned money will grow exponentially, but that do not necessarily cause problem, as long as A and B can borrow money to payback their debt, they do not need to worry about the debt, it is almost free, since those money are produced almost without any cost

The only problem is fairness, because we all know only banks and government can get these free loans. The result is, those who do not have such privilege get kicked out from their home and those who have the privilege get year-end-bonus

Mostly agreed, but its worse than that; if governments would take those free loans, it would be fine. After all, assuming a functional democracy, government==people. The reality is that its only the banks getting the virtually free loans, while the governments are lending from those banks at substantial interest rates. So think about it, EU governments allow the  ECB to create the money and lend to banks at 1%, then those very same governments lend from those very same banks at 3,4, or if you are Italy, 7+%. Now that is insanity. Or genius if you will, but its definitely how you transfer wealth from the poor to the rich.

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January 02, 2012, 01:03:58 PM
 #24

So think about it, EU governments allow the  ECB to create the money and lend to banks at 1%, then those very same governments lend from those very same banks at 3,4, or if you are Italy, 7+%. Now that is insanity. Or genius if you will,

They didn't allow the ECB, they ordered them. And changed half the board to put puppets in who would obey those orders. The govt is like an addict - they'd do anything for a shot. And every day they promise that they'll stay clean from tomorrow on.

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pusle
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January 02, 2012, 02:21:37 PM
 #25


The printing of money is happening anyway. I just wanna cut out the middle man and get schools, hospitals and roads instead of wall street super bonuses and private jets.
In addition this would minimize "business cycles" since debt and inequality is not buildt into the system.
Then 100dollars in your hand is actually 100dollar worth of "value" and not just a receipt of debt burdening some other guy.

If the government spends the money wisely there should also be a productivity increase preventing your dollar from losing purchasing power. (ie not tax)
If you instead see your cost of living climb higher and higher you know exactly who is to blame and what to do.
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January 05, 2012, 08:10:13 PM
 #26

Did I just see people in favor of centralized control of a fiat currency posting on a bitcoin forum?

What the hell are you even doing here?

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January 05, 2012, 08:50:08 PM
 #27

Did I just see people in favor of centralized control of a fiat currency posting on a bitcoin forum?

What the hell are you even doing here?

It's called exchange of ideas. And yes, better in plain view without a debt-element than the current system. But indeed, letting the market sort it out itself would be my favorite.

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January 06, 2012, 01:20:39 PM
 #28


The printing of money is happening anyway. I just wanna cut out the middle man and get schools, hospitals and roads instead of wall street super bonuses and private jets.

If I were you, I would worry about the quality of these schools, hopitals and roads if those are built by just printing money on pieces of paper.

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If the government spends the money wisely there should also be a productivity increase preventing your dollar from losing purchasing power. (ie not tax)

That's a huge "if".  The thing is that government is not wiser than free people.  Most of the time it just wastes the money into stupid things.
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January 06, 2012, 01:31:44 PM
 #29

That's a huge "if".  The thing is that government is not wiser than free people.  Most of the time it just wastes the money into stupid things.

Some thing just work better if the motivation is not short term financial profit for a few, but long term advantages for the entire society. Public transport, healthcare and education are some examples of that. There are enough countries where this does works properly, Ive not seen one where a free market properly addresses it.

Of course, that doesnt mean anything if you have government which has no interest in advancing society at large, because it doesnt represent the will of the people, but is beholden to special interests on which its entirely dependent for election and finance (even on an individual level, particularly after a political career). This is the problem in the US imo; not that a government would be doing these things, the problem is your government is no longer representative, so no matter what it does, its not designed to benefit you.  The solution is not replacing government by corporations (to a large extend, you already have that!). Fix your electoral system first, and then worry about what thing are best  achieved by profit only motives.

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January 06, 2012, 02:13:00 PM
 #30

The solution is not replacing government by corporations (to a large extend, you already have that!).

Corporations don't steal my money. They do not put me in jail if I don't buy their products.

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Fixget rid of your electoral system first, ...

Corrected.

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January 06, 2012, 03:06:52 PM
 #31


Corporations don't steal my money. They do not put me in jail if I don't buy their products.


That's not a question of organizational form, it's a question of power. Have a look at the East India Company. But then, they would indeed not have wasted their time with jailing you - there are other ways to treat you more cheaply. Shareholder value!

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January 07, 2012, 01:05:29 PM
 #32

As you are there, let me ask OT: Is the lack of young women from selective abortion really so extreme that many angry young men may disrupt society?

I could not get that deep into everyone's private life, but I'm sure there are many young people who simply do not want to find a partner and have children Cheesy

And, as the same as economy, they could always shift the potential partner to next generation if they could not find one in the current generation Cheesy


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January 07, 2012, 02:17:17 PM
 #33

Mostly agreed, but its worse than that; if governments would take those free loans, it would be fine. After all, assuming a functional democracy, government==people. The reality is that its only the banks getting the virtually free loans, while the governments are lending from those banks at substantial interest rates. So think about it, EU governments allow the  ECB to create the money and lend to banks at 1%, then those very same governments lend from those very same banks at 3,4, or if you are Italy, 7+%. Now that is insanity. Or genius if you will, but its definitely how you transfer wealth from the poor to the rich.

So you would buy long-term bonds on the government of Italy below 7% interest? Then, by all means, do it. Roll Eyes

It is not a good idea to construct any kind of money-printing feedback to government debt. How do you think the hyper-inflations happened? It was people constructing exactly this kind of genius plan, getting deadlocked into a position that produces ever-increasing amounts of paper with funny numbers on it.

The ECB model before 2008 was good. Don't go blame it for the "government==people" crew who considers creating trillions of dollars of debt a good plan. IMO, the ECB should cease buying bonds and return to doing its job. The people should focus on keeping public order and let the crappy governments implode. They are guilty of this debt crisis, not the banks or the Euro, and no amount of fancy blaming changes that.

Edit: before anyone starts screaming, I am aware some banks will disintegrate in the crisis, and I consider that acceptable. If the defaults are properly executed, people should still get a decent fraction of their accounts' contents.
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January 07, 2012, 02:23:04 PM
 #34


That's a huge "if".  The thing is that government is not wiser than free people.  Most of the time it just wastes the money into stupid things.


Let's make a case for some stupid things Smiley

On an island with only 2 people and one central bank, both A and B loaned 1 million dollar at the start of the day, the loan have 0 interest but must be returned at day end

A paid B 1 million dollar for B to sing a song, and B paied A 1 million dollar for him to dance in the court

A and B will be able to return the loan at day end. We could say that both A and B were doing stupid things but as long as they are doing it together, there will be no problem

What if only A paid 1 million for entertainment but B do not order 1 million entertainment from A? Then A will not be able to return the loan and B will have some saving, and B think A is a stupid guy: paying 1 million for a song

It's a typical "race of thrift", if one of them can live a low standard life by spending much less than the other, he will accumulate money and put the other into debt

This is what happened when US is doing business with China: Chinese can live a lower standard life by spending much less compared with US worker, this put US consumer/government into deep debt and chinese government into high surplus

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January 07, 2012, 05:51:51 PM
 #35


It is not a good idea to construct any kind of money-printing feedback to government debt. How do you think the hyper-inflations happened? It was people constructing exactly this kind of genius plan, getting deadlocked into a position that produces ever-increasing amounts of paper with funny numbers on it.

The ECB model before 2008 was good. Don't go blame it for the "government==people" crew who considers creating trillions of dollars of debt a good plan. IMO, the ECB should cease buying bonds and return to doing its job. The people should focus on keeping public order and let the crappy governments implode. They are guilty of this debt crisis, not the banks or the Euro, and no amount of fancy blaming changes that.

Edit: before anyone starts screaming, I am aware some banks will disintegrate in the crisis, and I consider that acceptable. If the defaults are properly executed, people should still get a decent fraction of their accounts' contents.

I won't scream nor claim I understand how it all works in detail. However I fail to see how banks/euro don't have  a large responsibility here.  The Euro as an "instrument" makes it possible for "lesser" governments to rack up huge debts without inflation to their currency. This also makes it possible for the productive/rich parts of the euro zone to sell tons of stuff to the countries  taking on tons of debt.  So what happenes? the rich , mostly companies, are left with all the money while the poor/stupid are left with all the debt.

When this imbalance becomes too large it threatens the stability of the whole system..
Enter taxpayers money to save the banks etc. What you see now is a scramble by the rich to keep their investments and the value of their money ( money which are somebody elses debt )

How can Greece accumulate this amount of debt without help from the Banks? My argument is that it's the Banks job NOT to lend tons of money to hobos who can never pay it back. If they do this they deserve to take huge losses and even fail.
That's what we have banks for, they are supposed to be the expert at knowing who to give loans to at what interest etc.
If they get bailed out they will never learn and just give out more loans. This feedback helps to keep them in check but it's now broken.

Euro as a system is doomed to fail too. Sure you can have Euro accepted at stores etc in all the EU countries, but each sovereign country must have it's government budget (and taxes) in their own currency. If they spend too much, the value of their own currency will fall and they can't but lots of stuff from abroad. At the same time their own industry becomes more competitive.  Another nice feedback loop providing stability which the Euro simply short circuits.

And why do they make systems undermining stability mechanisms? Well some people make tons of money, and a crisis is always good for those at the top.  While the weakest people have to take the austerity. Sure you could say it's their own damn fault for electing stupid representatives but a system designed for instability and inequality is pure evil.

It's time the debates on tv etc was about the monetary/financial system itself. It was invented in 1694.. I think we can do better today.
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January 07, 2012, 09:39:29 PM
 #36

The ECB model before 2008 was good.

imho partly suboptimal. ECB accepted all government bonds as collateral and this without any limits (as long as the rating was ok)
and this was wrong.

ecb did not distinguish between bonds from countries with low interests (i.e. germany) and higher interest (spain, greece) and since the risk was the same (both accepted by ecb) money went south. easy (not as cheap as in germany but still easy) credit for the governments and there you go, ECB was part of the problem all the time.

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January 07, 2012, 10:15:01 PM
 #37


Corporations don't steal my money.

really?

Quote
 They do not put me in jail if I don't buy their products.

If you live in the US, there is a huge chance your jails are run by for profit corporations, and those very same corporations are bribing your government to get as many customers as possible. No country in the world has a higher % of its population behind bars.

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January 07, 2012, 11:07:59 PM
 #38

No country in the world has a higher % of its population behind bars.

Apparently, it is easy to get into the private prison system in the USA.
http://www.buzzfeed.com/daves4/man-could-get-75-years-in-prison-for-recording-pol

Since 911, I am no longer wondering why Holocausts etc happen. Too many good men doing nothing....

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January 10, 2012, 01:44:57 PM
 #39

Mostly agreed, but its worse than that; if governments would take those free loans, it would be fine. After all, assuming a functional democracy, government==people. The reality is that its only the banks getting the virtually free loans, while the governments are lending from those banks at substantial interest rates. So think about it, EU governments allow the  ECB to create the money and lend to banks at 1%, then those very same governments lend from those very same banks at 3,4, or if you are Italy, 7+%. Now that is insanity. Or genius if you will, but its definitely how you transfer wealth from the poor to the rich.

China is another extreme. Chinese central bank is controlled by government, so their government will surely get free loan at the first place, thus increased purchase power for state-owned enterprises and organizations. But that does not necessary mean low efficiency, Chinese GDP is increasing by almost 10% per year

I think government can spend money more efficient than private corporation, since they have influence at much higher level, they can set higher and higher ISO standards, thus drive the quality of living forward. Chinese now can take high speed trains travel around in the country cheaply, due to government's investment in infrastructure


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January 14, 2012, 04:01:24 PM
 #40

On an island with only 2 people and one central bank, both A and B loaned 1 million dollar at the start of the day, the loan have 0 interest but must be returned at day end

A paid B 1 million dollar for B to sing a song, and B paied A 1 million dollar for him to dance in the court

A and B will be able to return the loan at day end. We could say that both A and B were doing stupid things but as long as they are doing it together, there will be no problem

What if only A paid 1 million for entertainment but B do not order 1 million entertainment from A? Then A will not be able to return the loan and B will have some saving, and B think A is a stupid guy: paying 1 million for a song

It's a typical "race of thrift", if one of them can live a low standard life by spending much less than the other, he will accumulate money and put the other into debt

Money is a tool for cooperation.  If B can not buy anything to A then the money he owns worths nothing.  So there is no problem.
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