View Full Version : Why do people have such a hard time understanding the monetary system?
dysgenic
4th July 2010, 02:31 PM
The people in my family mostly say that they understand the money system, but they clearly don't. Having a little cookout today and have some family over. All they can talk about is the rash of bank robberies around here over the past couple of weeks, and how the perps need to be punished for their crimes. Yet they have absolutely ZERO problem with the banks stealing their money covertly every single day. I've tried explaining the monetary system to all of my friends and all of my family, and I can honestly say that not one of them gets it. Why? I can't figure out what is so tough to understand.
dys
wildcard
4th July 2010, 02:34 PM
Their understanding has been clouded. I'm not preaching, but those that have not been selected to hear will never hear.
wildcard
4th July 2010, 02:44 PM
You sound tired and disgusted. Don't alienate your friends and family by hammering on them. Just make the info available and hope they take the bait. Kick back and relax. Enjoy life and stop worrying. If you believe in God, then refresh your faith.
http://www.youtube.com/watch?v=pw6_VXPwm6U
Twisted Titan
4th July 2010, 02:44 PM
John Kenneth Galbraith once famously said, “The process by which money is created is so simple that the mind is utterly repelled by it.
T
RJB
4th July 2010, 02:46 PM
It's the same reason people don't tour sausage factories.
The money bought them everything they wanted in the PAST, why question it now? Never rock the boat on the sea of illusion.
TPTB
4th July 2010, 04:20 PM
Good answers everyone.
Most people who study the monetary system do so in order to gain some economic advantage.
Almost never to criticize it and even rarer to condemn it as fundamentally wicked.
Why? Because there is no viable alternative while maintaining our current level of materialism.
If you were to speak of effective ways to profit from the monetary system, your family would sit in rapt awe of your economic wisdom.
People don't dare place too much wickedness on the system itself, only the bad men who use the system to their advantage.
Why? Because again, they see no real alternative and really what most want is to rise to the top using the same familiar system to there own advantage.
Condemn the monetary system and you will be condemned because it's so deeply woven into the fabric of civilizations material world. Remove it and the material unravels, or at least that's the perception we cling to.
One truly evil aspect of the monetary system is in fact, simply that there is no alternative.
Any monetary system that is inescapable and unavoidable does not represent freedom and liberty, it is the very definition of slavery and imprisonment. The only question is whether you are a field slave or a house slave.
dysgenic
4th July 2010, 04:44 PM
Unfortunately I think you are giving the majority of people too much credit here. I don't think they have the faintest clue how the system works, profit or not.
dys
Good answers everyone.
Most people who study the monetary system do so in order to gain some economic advantage.
Almost never to criticize it and even rarer to condemn it as fundamentally wicked.
Why? Because there is no viable alternative while maintaining our current level of materialism.
If you were to speak of effective ways to profit from the monetary system, your family would sit in rapt awe of your economic wisdom.
People don't dare place too much wickedness on the system itself, only the bad men who use the system to their advantage.
Why? Because again, they see no real alternative and really what most want is to rise to the top using the same familiar system to there own advantage.
Condemn the monetary system and you will be condemned because it's so deeply woven into the fabric of civilizations material world. Remove it and the material unravels, or at least that's the perception we cling to.
One truly evil aspect of the monetary system is in fact, simply that there is no alternative.
Any monetary system that is inescapable and unavoidable does not represent freedom and liberty, it is the very definition of slavery and imprisonment. The only question is whether you are a field slave or a house slave.
Desolation LineTrimmer
4th July 2010, 04:58 PM
The so-called common man is pragmatic above all else. The main thing he worries about is his income. So long as the system works, which translates so long as he is working, it's all to the good. And this is wise really. Appreciate how affluent we are here in the "first world". We live as kings of old. If the monetary system is fundamentally crooked then it is a crookedness he has benefited from. "So stfu!", he may be thinking over his barbecue. When those famous chickens come home to roost, then he will listen, but not quite. In fact, it will take a long while after the chickens have roosted, because he waits for the economy to rebound with a faith based on experience. "It must", he says, "rebound". Another 5 years of this depression and who knows, maybe we will have the revolution. What kind will it be?
Quantum
4th July 2010, 05:04 PM
The "schools," the Jewsmedia, the politicians, the corporate stooges, even the churches all teach half-truths and distortions about economics. Combined with a low-level of MIQ (math IQ), the average American is totally befuddled when it comes to economics.
It's not Federal.
It's has no Reserve.
It's not really money.
The three pillars of ignorance about the American economy.
Quantum
4th July 2010, 05:05 PM
John Kenneth Galbraith once famously said, “The process by which money is created is so simple that the mind is utterly repelled by it.
T
But the mechanism of the creation of satanic Babylonian "money" is not discussed. Most people have no clue how it takes place.
wildcard
4th July 2010, 05:08 PM
The so-called common man is pragmatic above all else. The main thing he worries about is his income. So long as the system works, which translates so long as he is working, it's all to the good. And this is wise really. Appreciate how affluent we are here in the "first world". We live as kings of old. If the monetary system is fundamentally crooked then it is a crookedness he has benefited from. "So stfu!", he may be thinking over his barbecue. When those famous chickens come home to roost, then he will listen, but not quite. In fact, it will take a long while after the chickens have roosted, because he waits for the economy to rebound with a faith based on experience. "It must", he says, "rebound". Another 5 years of this depression and who knows, maybe we will have the revolution. What kind will it be?
It'll be more French Revolution than American Revolution.
http://redfellow.files.wordpress.com/2008/11/guillotine.jpg
Desolation LineTrimmer
4th July 2010, 05:16 PM
The so-called common man is pragmatic above all else. The main thing he worries about is his income. So long as the system works, which translates so long as he is working, it's all to the good. And this is wise really. Appreciate how affluent we are here in the "first world". We live as kings of old. If the monetary system is fundamentally crooked then it is a crookedness he has benefited from. "So stfu!", he may be thinking over his barbecue. When those famous chickens come home to roost, then he will listen, but not quite. In fact, it will take a long while after the chickens have roosted, because he waits for the economy to rebound with a faith based on experience. "It must", he says, "rebound". Another 5 years of this depression and who knows, maybe we will have the revolution. What kind will it be?
It'll be more French Revolution than American Revolution.
http://redfellow.files.wordpress.com/2008/11/guillotine.jpg
I don't know, but I don't expect it will be like anything from the past. We have this crazy racial powder-keg here that the Frenchies didn't have.
wildcard
4th July 2010, 05:44 PM
Yeah the thin veneer of civilization is about to be peeled back and the streets are going to run red.
old steel
4th July 2010, 06:13 PM
Sadly i have to agree.
Only way things will change now.
Hopefully anger will be directed toward the guilty parties but the top Zionists have a way of deflecting the blame to
scapegoats with the old divide and conquer scheme or another war to divert attention from themselves.
We need to take them down. Period. End of story.
dysgenic
4th July 2010, 06:16 PM
I agree with just about everythiung in this post. Scapegoating is very difficult to mitigate when the people don't or can't understand usary. Has anyone had any success in trying to educate people on this abomination?
dys
Sadly i have to agree.
Only way things will change now.
Hopefully anger will be directed toward the guilty parties but the top Zionists have a way of deflecting the blame to
scapegoats with the old divide and conquer scheme or another war to divert attention from themselves.
We need to take them down. Period. End of story.
Desolation LineTrimmer
4th July 2010, 06:19 PM
We need to take them down. Period. End of story.
Yes, unfortunately this is true.
wildcard
4th July 2010, 06:23 PM
Hang in there dys. If you're trying to wake up someone you truly care about, but beware of the unintended consequences. Some people can't handle the truth.
dysgenic
4th July 2010, 06:43 PM
Tell someone a lie, make them angry.
Tell someone the truth, make them furious.
Hang in there dys. If you're trying to wake up someone you truly care about, but beware of the unintended consequences. Some people can't handle the truth.
Saul Mine
4th July 2010, 07:03 PM
It's because nobody teaches any part of it. You might have noticed that young people often can't understand why a bank refuses to cash their check drawn on a different bank in another town. It is somewhat unusual for a person to learn how to cash a check before they are old enough to vote. And they likely will be twice that age before they learn anything else about the financial system, if they ever learn at all.
Did you ever have a loan turned down by a bank because of something about "guidelines"? But the banker flatly refused to tell you what those guidelines were, didn't he? You would think he would want to tell you how to qualify for his service, but he won't. He knows very well that you would want to put him in jail if you learned how he does business.
hoarder
4th July 2010, 08:58 PM
Rather than try to ram the whole truth down someone's throat all at once, just plant seeds of thought in as many people as possible. When I meet them I will do the same.
Accept the fact that only a percentage of the teevee addled masses are willing to accept the fact that they have been badly decieved for a long time. After we wake up that small percentage, there will be lots more people going around planting seeds of thought. Use psychology to get around their psychological barriers.
More people are waking up daily. The dam is about to burst. Those who have their fingers in the cracks are very busy. Step on their toes. ;D
Quantum
4th July 2010, 11:30 PM
Rather than try to ram the whole truth down someone's throat all at once, just plant seeds of thought in as many people as possible.
Showing someone a Silver Certificate or a Peace Dollar - and briefly explaining their story - is a small step that usually works.
uranian
5th July 2010, 12:05 AM
not too long ago, my mother inherited a reasonable chunk of cash. while i've talked about the monetary system with my family for a while, at this point i thought it especially important that she understands that to put money into a bank is to essentially submit to a system that maintains her and everyone else in slavery. so i asked her to watch "money as debt", as a not complicated and not too long documentary.
she did, and claimed nothing presented was new to her. that she knew that money was created out of thin air and as debt, and that all that was fine, and her money would be in the stock market, thank you.
why? i've gently pointed out over the past year how much more she would have made in gold, still not getting it. the problem is that people do at some level understand that they are slaves (with the monetary system a big part of that), and the reality of that is so unpleasant that it is much easier not to face it. it boils down to fear and cowardice, to me. i guess there is some sense of the satanic paedophile lunatics that run the show, and it is much, much, much easier to reject any information that leans in that direction as a much too horrifying reality, than to honestly and courageously look a rather terrible situation in the face. which of course means the only way this will ever change is if the entire thing collapses, which we appear to be ever closer to by the day....agreed too with hoarder, more and more people are finding the necessary courage as it becomes clearer that things are falling apart and government is not being the good daddy it's supposed to be.
BrewTech
5th July 2010, 06:25 AM
I think a lot of it has to do with public schooling actively suppressing that type of learning. LRC has been posting articles daily about the damage-by-design of free, compulsory education... here's one good example:
The Anti-Educational Effects of Public Schools
http://www.lewrockwell.com/orig11/stolyarov1.1.1.html
jaybone
5th July 2010, 07:00 AM
Most people think the govt just prints up dollars and gives them to banks.
I think there is an issue of cognitive dissonance, the mind just cannot comprehend how it really works, at least not without some in depth study, which most folk want no part of.
I try to keep it simple:
Gov wants $, so it prints up bonds,
fed prints up fresh new $, and buys the bonds from the gov.
When you buy a bond, you get principle + interest when it comes due.
If the number of $ in existence = number of $ issued in bonds,
where do the $ to pay interest come from?
still too complex for most.
I think fluoride has a hand in it too; it is amazing how many things fell into focus as soon as I stopped consuming F
Skirnir
5th July 2010, 07:05 AM
Easy:
Many are not bright enough, and of those that are, most do not want to be bothered by anything more than 5 seconds in length. This sadly is the era of fast food, 'texting', punditry, and most of all: wilful stupidity.
iOWNme
5th July 2010, 07:29 AM
Dys,
I have had good luck with many people using very small examples, and doing it on a day to day basis. Even simple things like inflation. Everyone knows its real, and it just accepted like it is gravity or something. Explain it to them, that it is not natural and that it allows for the absolute confiscation of your wealth. You can set a $100 bill on the coffee table, and show them that this bill will always stay a $100 bill, but every single day that goes by it is able to buy less and less purchasing power in the Matrix.
Lay out a $1, $5, $10, $20, $100 on the table. See if anyone can show you the difference between a $1 and a $100. Surely if one of them is worth more, it should be bigger, weigh more etc.
Just using the Law itself shows the fraud, but most people are turned off by law. (Gee i wonder why?). Showing them that even their own Corporate De Facto Policy reveals that what we think is money, is not. It is LESS than money, for it is debt...(Fed Res Act, UCC, US Code, etc)
Lastly i like to use the Gold confiscation from the 30's as an example. Showing somebody that the Fed Gov STOLE the American people's REAL money, and compensated them with worthless paper, and gave the money creating authority to NON AMERICAN interests.
And lastly like others said, some people just wont get it. I have friends i have tried to help our financially (advice), and they seem to listen and understand. Then a week later this same person has a new car, spent a couple grand on a cc, or whatever. Once you FULLY can stand under this system of Satan, you would NEVER abuse yourself by accessing fictional credit, digging yourself into a paper hole with compounding make believe interest.
I actually feel bad for a lot of people. They use money as a medium to get the materialistic things they think will fill the whole in their soul. They work very hard, everyday to achieve this great nothingness. Life is so short, they spend their precious time living in the 'future; in their minds. For in the future is when they shall get the money they need to be able to then, live their life. It is a depressing reality for hundreds of millions of Americans. So they never really live; they work hard for the dream/idea that one day, when they get a lot of money, then they can then begin to enjoy this life. And its only because 'society' has inculcated people into believing that the real substance and purpose to this life is to obtain, consume and conquer as much materialistic, selfish and egotistic driven agendas as one can.
Which, of course in turn, takes money to do......
Ash_Williams
5th July 2010, 07:47 AM
Here's the stages of understanding of things in modern times.
1. You don't understand and you don't even know you don't understand. You ignore all questions that make you face your ignorance.
2. Fancy internet video tells you a dumbed down version that they contrast with a strawman they call the official story.
3. Now you feel like you understand and everyone else is stupid. You ignore all questions that would make you face your ignorance.
4. Most people don't make it this far. You take a look at the subject rationally and realize that yes, what you originally thought was stupid, but also the alternative view isn't correct either. Then you can start figuring out how it works.
There was a quote about how anyone that understood the money system, would not oppose it. I believe this is truer than many on here would think.
The 4 points coincide with 4 other points of attitude.
1. Life is fine, things are maybe a bit unfair in the world but not so bad. I have a chance.
2. OMG watch this video, Imma a victimms!!! EVIL RULERS 733t bankerzzz!!11!!
3. I'm so mad and oppressed.
4. Hold on... overall I'm getting the big end of the stick here... I'm benefiting from the scam, not suffering. Now I have something to think about.
cedarchopper
5th July 2010, 08:39 AM
It is not just public schools that don't teach about money...it is on the university level also, especially. The Federal Reserve has an unlimited expense account to support monetary education (part of the Congressional legislation in their authorization)...with this support, they pay for the economic chairs at the most prestigious university's, and influence what is acceptable to teach throughout the country.
None Usury monetary systems are the forbidden fruit in economics education. You hear very little about the details of the Colonial Script debt free monetary system, or even the Greenback during the so-called Civil War. You never hear about Nazi Germany's rise from utter economic devastation from the Wiemar collapse into a dominate global military power in less than 5 years under a non-usury economic regime (I'm speaking from a purely economic standpoint...not condoning the regime in general).
Non-usury economic systems are the secret key to the prosperity of the people, and why they are taboo in the elites systems.
jaybone
5th July 2010, 08:55 AM
Ash,
I think you make a good point,
that Americans have benefited greatly from the fiat money scam at the expense of the rest of the world,
at the same time we as individuals are being robbed of purchasing power.
So I guess one question is which is greater: benefit from cheap foreign oil and goods, made cheap by the USD being the reserve currency.
OR, detriment from inflation, making those cheap goods less cheap every day.
Another question is how is it morally OK to export the inflation from our gov largesse to the poor and exploited around the world.
In my estimation, the average American lives a easier and more productive, though immoral living under the fiat money system. We cannot have our cake and eat it too; sometimes doing the right thing is painful.
RJB
5th July 2010, 09:08 AM
There is an old story of a conversation between a wolf and a dog.
The wolf tells the dog of how occasionally he goes without food, but other times there is plenty after the thrill of the hunt.
The dog tells the wolf of his abundance of food and shelter.
The wolf starts to envy the dog until he asks about the collar and chain connected to the dog's neck. The dog says it's part of the deal.
The wolf and the dog part ways, neither understanding the other. Most people will no more question their chains than a dog would. Some still won't even after they no longer get any food.
Hatha Sunahara
5th July 2010, 09:58 AM
TPTB obfuscate all the facts about the money system. For example, in the Fed's publication Modern Money Mechanics, they go to great lengths to describe how fractional reserve banking works. They give an example of how a bank will lend out money, and 9/10ths of it comes back as deposits, enabling them to lend out 9/10ths of that amount, and for another ten steps of borrowing and deposits until the 'multiplier' is exhausted. They could condense it down to a simple statement. If you deposit $10,000 in your account, they have a license to lend out $90,000. They could tell you that they make 9 times or more interest on the money they can lend from your deposit than what they pay you as interest.
They could point out to you that not only do you have to pay interest, but you also have to put up collateral for a loan, so you take all the risk. If you lose your job and can't make the payments, the bank seizes the collateral, and you have nothing. They could tell people that the banks take NO risk on fiat money because it all comes from thin air, and you take all the risk, and you pay them for something that is a free good. They could tell you that you have to work for your money, and they don't. But they don't tell you anything like that. Like Saul Mine said, they don't teach this in school. They don't even teach people how to balance their checkbooks in school. That's because they own the agenda of what is taught in public schools, and they punish people who tell others how crooked the banking game is. It's not politically correct to talk about the banks or the banking system. Not politically correct to tell people the truth.
Most people know that there are a lot of things that they do not want to know. They know that if they knew these things, their lives would become more complicated and less happy. They don't want to know about money, and they don't want to know about wars, and they don't want to know about corruption. So they build walls around these subjects and ignore what is inside the walls--knowing that if it bites them, it will bite everybody else. There is safety in numbers, even when there isn't. Plus, people don't want to admit ignorance. So they pretend they understand what is going on, even when they don't, and you can't force them to talk about it, or even look at what they don't want to know. It is willed ignorance, which is the worst kind of evil because it enables far worse evil to prevail.
Hatha
Ash_Williams
5th July 2010, 10:03 AM
Another question is how is it morally OK to export the inflation from our gov largesse to the poor and exploited around the world.
In my estimation, the average American lives a easier and more productive, though immoral living under the fiat money system. We cannot have our cake and eat it too; sometimes doing the right thing is painful.
That question is at the heart of why people have such a hard time understanding the monetary system. You can't teach people on mass that us good people are taking advantage of a system to exploit the poor. Popular morality makes it better to be the victim, so that's as far as it goes for most people.
And that type of morality would be our downfall if the way things worked was understood by the masses. Guilt, combined with ignorance, would result in an attempt to make things fair. Too bad that 'fair' means the few of us in the west that are living large will have to start living a lot more like the billions of poor in the world. No more complaining about how expensive it is to buy gas for the two cars and heat the giant house and go on that cruise. Oh it's such hard work sitting at a desk and looking at facebook 8 hours a day, and steak dinners are getting sooo expensive!
The average poor person in America lives in a house, owns a car, a microwave, a fridge, and I believe 67% also have cable/satellite TV. The poor we are so worried have a lifestyle that most of the world would envy. It's pretty easy to think about all the things you consume in a day, then imagine how long it would take you to produce those (even if you were skilled and working on the assembly line.) What is the factor of what you use compared to what you could produce? I bet I consume at least 5x what I produce, and I'm not even a wasteful person. We can work 8 hours a day and have everything here because some guy in china busts his ass 13 hours a day and has nothing.
Given the choice, I'd be the exploiter over the exploited.
The problem with making things fair is that it doesn't mean everyone becomes wealthy. It means everyone becomes poor. But people don't understand that and they would shoot themselves in the foot to give up what we have because they think it will make things better. There is no solution where 7 billion people get nice houses and cars and can take trips around the world and have kids and TVs and doctors and never need to worry about food.
Even if that solution became a reality, humans share a trait with many other species, in that the population will expand until resources become limited again. It's in our genes and it's in our minds (we can't deal with excess capacity... if you give a man a house with 20 rooms, he will find a way to fill each one of those rooms with something. If a man gets a raise, he will spend more. If a lane is added to the highway, the congestion returns quickly as the volume increases to meet the capacity..) There will always be poor and hungry because if there's ever enough food and resources, people will take that as a sign we need more people.
Ash_Williams
5th July 2010, 10:04 AM
They could tell people that the banks take NO risk on fiat money because it all comes from thin air, and you take all the risk
If they took no risk then the answer to "bank failure friday" should always be 0.
dysgenic
5th July 2010, 10:09 AM
The beginning of this post is a perfect example of what I try to teach people and what they refuse to learn. Hatha's got it right- the lender risks nothing when they are the bank. I think it's also important to point out that even people that don't borrow pay anyway, because the prices of everything (especially assets) get artificially driven up (read: inflation), and also that the fruits of the system are malinvestment and tyranny.
I also agree with the 'willful ignorance' theory.
dys
TPTB obfuscate all the facts about the money system. For example, in the Fed's publication Modern Money Mechanics, they go to great lengths to describe how fractional reserve banking works. They give an example of how a bank will lend out money, and 9/10ths of it comes back as deposits, enabling them to lend out 9/10ths of that amount, and for another ten steps of borrowing and deposits until the 'multiplier' is exhausted. They could condense it down to a simple statement. If you deposit $10,000 in your account, they have a license to lend out $90,000. They could tell you that they make 9 times or more interest on the money they can lend from your deposit than what they pay you as interest.
They could point out to you that not only do you have to pay interest, but you also have to put up collateral for a loan, so you take all the risk. If you lose your job and can't make the payments, the bank seizes the collateral, and you have nothing. They could tell people that the banks take NO risk on fiat money because it all comes from thin air, and you take all the risk, and you pay them for something that is a free good. They could tell you that you have to work for your money, and they don't. But they don't tell you anything like that. Like Saul Mine said, they don't teach this in school. They don't even teach people how to balance their checkbooks in school. That's because they own the agenda of what is taught in public schools, and they punish people who tell others how crooked the banking game is. It's not politically correct to talk about the banks or the banking system. Not politically correct to tell people the truth.
Most people know that there are a lot of things that they do not want to know. They know that if they knew these things, their lives would become more complicated and less happy. They don't want to know about money, and they don't want to know about wars, and they don't want to know about corruption. So they build walls around these subjects and ignore what is inside the walls--knowing that if it bites them, it will bite everybody else. There is safety in numbers, even when there isn't. Plus, people don't want to admit ignorance. So they pretend they understand what is going on, even when they don't, and you can't force them to talk about it, or even look at what they don't want to know. It is willed ignorance, which is the worst kind of evil because it enables far worse evil to prevail.
Hatha
dysgenic
5th July 2010, 10:16 AM
Please explain what the bank stands to lose when they lend money and the loan goes bad.
dys
They could tell people that the banks take NO risk on fiat money because it all comes from thin air, and you take all the risk
If they took no risk then the answer to "bank failure friday" should always be 0.
Ash_Williams
5th July 2010, 12:06 PM
Please explain what the bank stands to lose when they lend money and the loan goes bad.
The bank gives a loan and the customer uses that money to purchase something from the seller. The seller has been paid.
The "thin air" part is true in a way but it doesn't mean zero risk.
Let's say we were out in a parking lot, neither of us had any cash, but you had a checkbook. I could ask you for $20 so that I could go buy a case of beer. I promise to pay you back $20 tomorrow plus $2 for your trouble. So you agree and you write a check for $20 that the beer store accepts (they are nice there.)
If everything goes to plan, I pay you back the next day, and the check clears in another 3 days. You end up making $2 for your trouble.
However, maybe I'm a guy who just watched a lot of internet movies, and I find out that you only had $5 in your checking account. You wrote a $20 check and you only had $5? Therefore you created money out of thin air! There was no risk to you 'cause the money never existed! You were taking advantage of me! So I don't pay you.
Now your checking account is -15$ (your bank is nice and doesn't charge overdraft) and I have a case of beer.
If you were smart you may have anticipated this and wrote a contract where you get the beer if I don't pay up. In that case you have to sell the beer and hope to get your $20 back, which you may not if it's now expired or I drank some of it or it's otherwise gone down in value.
Bigjon
5th July 2010, 02:20 PM
http://www.michaeljournal.org/plenty.htm
In This Age of Plenty
français
This 410-page book presents a new conception of finance, of the money system, that would definitely free society from purely financial problems. Its author, Louis Even, sets out the outlines of the Social Credit financial proposals, conceived by the Scottish engineer Clifford Hugh Douglas.
Contents
Preface (to the first edition in French)
This book talks about Social Credit, but it is far from being a general survey of Social Credit. Social Credit is actually a whole orientation of civilization, and deals with its social and political, as well as its economic, aspects. We even believe, with Douglas  to whom the world owes this enlightening doctrine  that putting right the economic order along Social Credit lines, is impossible without first putting right the political order.
In this volume, however  except for a few thoughts incidental to the repercussions of a flawed and dominating financial system on politics  we have confined our study to economic objectives and Social Credit financial proposals.
Louis Even
The title of this book  In This Age of Plenty  clearly shows that we are now dealing with an economy of plenty, in which the access to the huge possibilities of modern production is made easier for all.
“Old economics†was ruled by the presence of gold or any other rare commodity, when production itself was scarce. But it is to go against progress and logic, to want to keep an instrument linked to scarcity, to confer claims on automated production.
In the first part of this volume, we recall essential and very simple notions that everybody readily admits, but which are almost totally ignored in the present economic organism. The ends no longer direct the means. A short study of the present monetary system shows that money governs where it ought to serve. We present the Social Credit proposals as a remedy, explaining the outlines, without going into the methods of application. The problem, we believe, is not so much to develop a technique of operation, as to reach an agreement on ideas, which seem both too simple and too bold to the minds who are accustomed to losing sight of the ends, and to getting bogged down in the complexity of the means. So, several chapters are especially intended to justify the Social Credit doctrine.
The second part reproduces, without necessarily being linked with each other, certain speeches and articles which throw light on the various aspects of Social Credit.
In offering this book to the public, we have especially in mind the ordinary reader, who has no special knowledge of economics. Even in dealing with specific topics, we avoid technical terms as much as possible, since they are more likely to tire readers than to enlighten them. We strived to write in such a way as to be easily understood by the great majority of people  which, besides, is in the spirit of an economy of plenty to serve and everyone.
Montreal, May 1st, 1946.
LOUIS EVEN
Preface to the present edition
~more~
http://www.michaeljournal.org/plenty.htm
gunDriller
5th July 2010, 02:49 PM
just slow i guess.
i still don't understand it.
i know they create money out of thin air, and create accounting ledgers with debits and credits.
and they also lie a lot.
Chris Martenson takes a shot at explaining it in the Crash Course.
when i say "understand", i mean, understand in detail. who owns the Federal Reserve, what are their names, how does the Fed make money (more than "they loan money created out of thin air and collect interest").
possibly i have the basic idea but i still don't feel like i understand it.
i do understand it's become a lot less trustworthy the last 10 years and so to depend on it (to preserve your savings) is a HUGE mistake.
dysgenic
5th July 2010, 03:14 PM
Your analogy is fatally flawed. In the situation you describe, the lender of the $20 if analogous to a bank would NOT end up with a negative balance if the check bounced. Instead, they would have legal remedies to recompanse against the borrower that actually borrowed nothing more than a magic trick that the person selling the beer believed to actually be real money (but wasn't). This should be apparent in that the bank uder the fractitional reserve system can lend between 9 and 40x as much money as they have on deposit (depending on who you ask, personally I believe the multiplier effect in reality is as high as they want it to be).
dys
Please explain what the bank stands to lose when they lend money and the loan goes bad.
The bank gives a loan and the customer uses that money to purchase something from the seller. The seller has been paid.
The "thin air" part is true in a way but it doesn't mean zero risk.
Let's say we were out in a parking lot, neither of us had any cash, but you had a checkbook. I could ask you for $20 so that I could go buy a case of beer. I promise to pay you back $20 tomorrow plus $2 for your trouble. So you agree and you write a check for $20 that the beer store accepts (they are nice there.)
If everything goes to plan, I pay you back the next day, and the check clears in another 3 days. You end up making $2 for your trouble.
However, maybe I'm a guy who just watched a lot of internet movies, and I find out that you only had $5 in your checking account. You wrote a $20 check and you only had $5? Therefore you created money out of thin air! There was no risk to you 'cause the money never existed! You were taking advantage of me! So I don't pay you.
Now your checking account is -15$ (your bank is nice and doesn't charge overdraft) and I have a case of beer.
If you were smart you may have anticipated this and wrote a contract where you get the beer if I don't pay up. In that case you have to sell the beer and hope to get your $20 back, which you may not if it's now expired or I drank some of it or it's otherwise gone down in value.
Quantum
5th July 2010, 03:32 PM
A bank does not fail until the SUCKERS on the lower levels of the pyramid cannot or decide not to pay the top level.
All banks engage in the ponzi scheme of fractional reserve banking with full knowledge of theoretical TOTAL FAIL. They gamble that they won't experience it. And they attempt to shift the burden to someone else.
Feeling bad for banks that experience TOTAL FAIL is just as stupid as feeling bad for the House when they lose at Blackjack.
BabushkaLady
5th July 2010, 04:03 PM
This is a great thread!
As to the original question; as mentioned, THEY don't want to understand.
I have found some kids that get the concept when it is demonstrated to them. I once charged a "late fee" for a Three Stooges video I loaned to a kid. I told him upfront it was going to be .25 a day. Two weeks later, he even got the fact that he paid more in late fees then the "free" movie cost to borrow.
Forget the grownups, teach on the young ones!!
uranian
5th July 2010, 04:06 PM
TPTB obfuscate all the facts about the money system. For example, in the Fed's publication Modern Money Mechanics, they go to great lengths to describe how fractional reserve banking works. They give an example of how a bank will lend out money, and 9/10ths of it comes back as deposits, enabling them to lend out 9/10ths of that amount, and for another ten steps of borrowing and deposits until the 'multiplier' is exhausted. They could condense it down to a simple statement. If you deposit $10,000 in your account, they have a license to lend out $90,000. They could tell you that they make 9 times or more interest on the money they can lend from your deposit than what they pay you as interest.
They could point out to you that not only do you have to pay interest, but you also have to put up collateral for a loan, so you take all the risk. If you lose your job and can't make the payments, the bank seizes the collateral, and you have nothing. They could tell people that the banks take NO risk on fiat money because it all comes from thin air, and you take all the risk, and you pay them for something that is a free good. They could tell you that you have to work for your money, and they don't. But they don't tell you anything like that. Like Saul Mine said, they don't teach this in school. They don't even teach people how to balance their checkbooks in school. That's because they own the agenda of what is taught in public schools, and they punish people who tell others how crooked the banking game is. It's not politically correct to talk about the banks or the banking system. Not politically correct to tell people the truth.
Most people know that there are a lot of things that they do not want to know. They know that if they knew these things, their lives would become more complicated and less happy. They don't want to know about money, and they don't want to know about wars, and they don't want to know about corruption. So they build walls around these subjects and ignore what is inside the walls--knowing that if it bites them, it will bite everybody else. There is safety in numbers, even when there isn't. Plus, people don't want to admit ignorance. So they pretend they understand what is going on, even when they don't, and you can't force them to talk about it, or even look at what they don't want to know. It is willed ignorance, which is the worst kind of evil because it enables far worse evil to prevail.
Hatha
mostly i agree, but the only risk to the bank that i can see is that if there is some sort of reserve requirement, a failed loan means they have less reserves and thus can lend less, thereby making less profit. however given that reserve requirements are pretty much at zero (http://en.wikipedia.org/wiki/Regulatory_arbitrage#Regulatory_arbitrage) these days it's moot.
In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper. Deposits are merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value. What, then, makes these instruments --checks, paper money, and coins-- acceptable at face value in payment of all debts and other monetary uses?
that's from Modern Money Mechanics, and rather rubs your nose in it, rather than obfuscates it.
Hatha Sunahara
5th July 2010, 07:46 PM
They obfuscate the logic of the multiplier. They make it sound like they actually have to keep cash reserves. 10% of your deposit in fact. That's not accurate. When you deposit $10,000 in a bank, the bank keeps the whole $10,000 as cash, and simultaneously conjure up $90,000 out of thin air and lend it. At an interest rate higher than what they pay you. They won't admit that this is 'systemic usury' because it is hidden in the details. If the bank pays you 4% interest, in a year you will get $400. The bank will charge 5% on the $90,000 they lend. Their interest income will be $4,500, and their net profit after they pay you will be $4,100--more than 10 times what they pay you. All because you deposited $10,000 of your money (that you worked for) in their bank.
Most people believe that the bank lends out the money that people deposit in the bank. They do not. They lend out the 'multiplier'. Why do people believe that? Why don't the bankers tell them what they really do? Why did they write modern money mechanics the way they did?
There are two kinds of people: Those who work for a living, and usurers, who don't work for a living, and look down condescendingly on those people who do. Only people who work for a living and save their money should be entitled to earn interest on that money. The monopoly on the 'creation of credit'--that is, pulling money out of thin air should be publicly owned, and you should be able to borrow that money interest free, but required to offer collateral for the loan. If you have no collateral, a very small interest charge should suffice in lieu.
Banking, the way we tolerate it, is a license to steal from 'stupid goyim'. Woe unto the bankers when the 'stupid goyim' wise up. If we thought of ourselves as 'stupid goyim' the way the bankers think of us, we wouldn't have this system.
Hatha
dysgenic
5th July 2010, 07:52 PM
Very well said, Hatha. There was a thread on GIM1 discussing the monetary system probably 2-3 months before it closed, and someone said (I can't remember who, paraphrase) "this subject has been discussed a lot here, and as far as I'm concerned it can't be discussed enough". I feel the same way.
dys
They obfuscate the logic of the multiplier. They make it sound like they actually have to keep cash reserves. 10% of your deposit in fact. That's not accurate. When you deposit $10,000 in a bank, the bank keeps the whole $10,000 as cash, and simultaneously conjure up $90,000 out of thin air and lend it. At an interest rate higher than what they pay you. They won't admit that this is 'systemic usury' because it is hidden in the details. If the bank pays you 4% interest, in a year you will get $400. The bank will charge 5% on the $90,000 they lend. Their interest income will be $4,500, and their net profit after they pay you will be $4,100--more than 10 times what they pay you. All because you deposited $10,000 of your money (that you worked for) in their bank.
There are two kinds of people: Those who work for a living, and usurers, who don't work for a living, and look down condescendingly on those people who do. Only people who work for a living and save their money should be entitled to earn interest on that money. The monopoly on the 'creation of credit'--that is, pulling money out of thin air should be publicly owned, and you should be able to borrow that money interest free, but required to offer collateral for the loan. If you have no collateral, a very small interest charge should suffice in lieu.
Banking, the way we tolerate it, is a license to steal from 'stupid goyim'. Woe unto the bankers when the 'stupid goyim' wise up. If we thought of ourselves as 'stupid goyim' the way the bankers think of us, we wouldn't have this system.
Hatha
Bigjon
5th July 2010, 09:02 PM
There is one persuasive piece of propaganda that interest comes from money outside of the loan, very few understand the ability of banks to pay the interest on a loan within the bounds of the money lent.
It is real simple and it is in the way the loan repayment is structured. When you make your payments the banker takes his interest and spends it back into a pool of money called the economy. It is now available for you to re-earn with your labor over the next time period until your loan payment is due.
Step two make your payment to the banker he takes his cut (interest) and spends it back into the economy, where it is available for you to re-earn over the next time period until your loan payment is due.
Step three make your payment to the banker he takes his cut (interest) and spends it back into the economy, where it is available for you to re-earn over the next time period until your loan payment is due.
Step four make your payment to the banker he takes his cut (interest) and spends it back into the economy, where it is available for you to re-earn over the next time period until your loan payment is due.
Keep repeating these steps until loan is paid.
You are the bankers slave.
Nobody held a gun to your head and forced you to take out the loan
In our system the banker is not legally obligated to spend the interest back into the economy and banks have withheld their spending to create a deflation.
Grand Master Melon
5th July 2010, 09:14 PM
While many are too stupid to understand it, others probably attempt to seek out information, probably from sites like gsus but then get disuaded by nonsene like this:
http://gold-silver.us/forum/general-discussion/black-people-in-nazi-germany/
Silver Rocket Bitches!
6th July 2010, 06:42 AM
It all starts with education.
Ignorant masses are much easier to take advantage of than intelligent self-thinkers.
Ask the average consumer to compute compounding interest... Blank stare.
It's by design. This monetary knowledge needed is taught in select elite schools. The rest are on a dumbed-down agenda created to keep the masses in perpetual ignorance.
Congratulations to all of you who saw the need for self-education. It is the only way to learn these topics today.
Ash_Williams
6th July 2010, 06:50 AM
Your analogy is fatally flawed. In the situation you describe, the lender of the $20 if analogous to a bank would NOT end up with a negative balance if the check bounced. Instead, they would have legal remedies to recompanse against the borrower that actually borrowed nothing more than a magic trick that the person selling the beer believed to actually be real money (but wasn't). This should be apparent in that the bank uder the fractitional reserve system can lend between 9 and 40x as much money as they have on deposit (depending on who you ask, personally I believe the multiplier effect in reality is as high as they want it to be).
dys
Right. In some states the bank could repossess the beer, sell it, and bill the customer for the difference. It is like if you took me to small claims court and got a judgment against me telling me to pay for the beer. Yet we are still seeing bank failures. What if I lost my job and simply will never have that beer money? What if I just don't answer your phone calls? Maybe I declare bankruptcy. You are screwed in those cases. The risk is entirely real.
Also lets say it costs you $1.50 to write a check. Are you going to just take that as a loss to do me a favor? Banks have expenses. You may write a dozen checks for $20 and hope to get a dozen people pay you back at $22. It doesn't mean your best-case profit is $24 - it is only $6 (30% still, not bad). If anyone gives you trouble (and certainly at least 1 person out of 12 will) your profit shrinks even further.
gunDriller
6th July 2010, 07:10 AM
It all starts with education.
Ignorant masses are much easier to take advantage of than intelligent self-thinkers.
true.
but fresh young naive college students are one of the Usurers' favorite targets.
Skirnir
6th July 2010, 07:16 AM
That is not how fractional-reserve lending works to my understanding:
With a 10% reserve requirement and a $100 deposit, the bank can only lend 90% of the deposit i.e. $90. The multiplier comes into being because the $90 finds itself redeposited elsewhere and that bank may lend another $81. The net result is a 'multiplication' of the initial deposit by approximately 1/RR, in this case, ten-fold.
Ad-infinitum, a $100 deposit would yield $1K in deposits, $900 in loans, and $100 in reserves. Thus, a bank charges more for loans than deposits because should each be deposited or lent at 5%/yr, the bank would lose .05*(1000-900)=$5 i.e. 5% of its reserves, so more is charged upon loans than deposits. Thus, banks branch out fee-based models via services because lending is not as lucrative as you would believe.
This college student beat credit card companies at their own game by accepting cards, taking the bonuses, paying them off, and cancelling them. Sears is particularly stupid with its cards, I have managed to get 3 $15 bonuses by cancelling and re-applying ;D who is naive now?
Bigjon
6th July 2010, 10:51 AM
The Fed’s current reserve requirements can be found here (http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=b2c48997b2c7e67d99a33f4725ac55b2&rgn=div8&view=text&node=12:2.0.1.1.5.0.2.4&idno=12)
Reservable liability Reserve requirement ratio
NET TRANSACTION ACCOUNTS:
$0 to reserve requirement exemption amount ($10.7 million) 0 percent of amount.
Over reserve requirement exemption amount ($10.7 million) and up to low reserve tranche ($55.2 million) 3 percent of amount.
Over low reserve tranche ($55.2 million) $1,335,000 plus 10 percent of amount over $55.2 million.
Nonpersonal time deposits 0 percent.
Eurocurrency liabilities 0 percent.
[Reg. D, 74 FR 25637, May 29, 2009, as amended at 74 FR 52875, Oct. 15, 2009]
TheNocturnalEgyptian
6th July 2010, 11:15 AM
Look man, money is the thing that people have killed themselves for, sweat over, bled for, they'd done everything for it and felt good about their sacrifice afterwards..
Now we come along and say, "We should do away with that old system and create something fair"
It makes them realize they sacrificed for a fiat piece of paper. You don't expect a little trouble understanding that this is their life?
Skirnir
6th July 2010, 12:03 PM
In the context of Plato's cave, many are cavemen and belong there ::)
Bigjon
6th July 2010, 12:53 PM
That is not how fractional-reserve lending works to my understanding:
With a 10% reserve requirement and a $100 deposit, the bank can only lend 90% of the deposit i.e. $90. The multiplier comes into being because the $90 finds itself redeposited elsewhere and that bank may lend another $81. The net result is a 'multiplication' of the initial deposit by approximately 1/RR, in this case, ten-fold.
Ad-infinitum, a $100 deposit would yield $1K in deposits, $900 in loans, and $100 in reserves. Thus, a bank charges more for loans than deposits because should each be deposited or lent at 5%/yr, the bank would lose .05*(1000-900)=$5 i.e. 5% of its reserves, so more is charged upon loans than deposits. Thus, banks branch out fee-based models via services because lending is not as lucrative as you would believe.
This college student beat credit card companies at their own game by accepting cards, taking the bonuses, paying them off, and cancelling them. Sears is particularly stupid with its cards, I have managed to get 3 $15 bonuses by cancelling and re-applying ;D who is naive now?
Your example is the textbook example of how fractional reserves work. This only works for primary money which is US treasury checks or Federal Reserve Notes.
However the Fed’s rules on this are that reserves must be kept as vault cash or on deposit at a bank’s Federal Reserve branch office. So the bank in question can put the whole $100.00 on deposit or keep it as vault cash and write a loan for $1000.00.
I am not at all clear on how they handle secondary (not even sure they call it secondary) money or checkbook money which is money deposited from a checking account (expanded money).
Skirnir
6th July 2010, 03:42 PM
That is not how fractional-reserve lending works to my understanding:
With a 10% reserve requirement and a $100 deposit, the bank can only lend 90% of the deposit i.e. $90. The multiplier comes into being because the $90 finds itself redeposited elsewhere and that bank may lend another $81. The net result is a 'multiplication' of the initial deposit by approximately 1/RR, in this case, ten-fold.
Ad-infinitum, a $100 deposit would yield $1K in deposits, $900 in loans, and $100 in reserves. Thus, a bank charges more for loans than deposits because should each be deposited or lent at 5%/yr, the bank would lose .05*(1000-900)=$5 i.e. 5% of its reserves, so more is charged upon loans than deposits. Thus, banks branch out fee-based models via services because lending is not as lucrative as you would believe.
This college student beat credit card companies at their own game by accepting cards, taking the bonuses, paying them off, and cancelling them. Sears is particularly stupid with its cards, I have managed to get 3 $15 bonuses by cancelling and re-applying ;D who is naive now?
Your example is the textbook example of how fractional reserves work. This only works for primary money which is US treasury checks or Federal Reserve Notes.
However the Fed’s rules on this are that reserves must be kept as vault cash or on deposit at a bank’s Federal Reserve branch office. So the bank in question can put the whole $100.00 on deposit or keep it as vault cash and write a loan for $1000.00.
I am not at all clear on how they handle secondary (not even sure they call it secondary) money or checkbook money which is money deposited from a checking account (expanded money).
Can you cite the Fed's rules on this?
Bigjon
6th July 2010, 05:18 PM
http://www.federalreserve.gov/monetarypolicy/reservereq.htm
When you want a loan at the bank they ask for earnest money so you give them a check and they create a deposit for you. They don’t have to wait around for some money to turn up
I would suppose they cash my check and get FRN's which then becomes vault cash.
Skirnir
6th July 2010, 05:21 PM
When you want a loan at the bank they ask for earnest money so you give them a check and they create a deposit for you. They don’t have to wait around for some money to turn up
I would suppose they cash my check and get FRN's which then becomes vault cash.
Could you clarify?
Bigjon
6th July 2010, 05:23 PM
Maybe, if you can make it clear what you're asking for?
Skirnir
6th July 2010, 05:42 PM
It was unclear what was happening in your explanation as you failed to specify what the lender and the borrower are doing. English is a horrid language for explaining anything beyond the caveman's 'subject verb object'. That said, if my understanding of your response is correct, the the bank cuts a cheque to the borrower and that deposit is created.
However, the website failed to explain why a bank can 'create a deposit' out of thin air, it would have to be debited from the bank's account and a reserve (be it 0, 3, or 10%) moved to the Fed. If they were able to create deposits ex nihilo, no bank would go under and the expansion of credit would be infinite, ergo that scenario is absurd.
Instead, what is happening is just a step in the process of the money multiplier effect: a loan is made from deposits, a reserve is held at the Fed, repeat.
Bigjon
6th July 2010, 06:01 PM
It was unclear what was happening in your explanation as you failed to specify what the lender and the borrower are doing. English is a horrid language for explaining anything beyond the caveman's 'subject verb object'. That said, if my understanding of your response is correct, the the bank cuts a cheque to the borrower and that deposit is created.
However, the website failed to explain why a bank can 'create a deposit' out of thin air, it would have to be debited from the bank's account and a reserve (be it 0, 3, or 10%) moved to the Fed. If they were able to create deposits ex nihilo, no bank would go under and the expansion of credit would be infinite, ergo that scenario is absurd.
Instead, what is happening is just a step in the process of the money multiplier effect: a loan is made from deposits, a reserve is held at the Fed, repeat.
No, the loan is not made from deposits. The loan is created out of thin air. The loan is a number in an account. If they gave joe bloe money from their deposits they would have to subtract from those deposits and you wouldn’t be very happy when you got your statement that said we had to loan some money to joe bloe, so we took it from your account.
The loan is most likely subject to a 3% reserve. That reserve is what stops banks from creating money willy-nilly.
However during the last ten years as fast as banks made loan they sold them and got them off of their books. These loans were turned into CMO’s (collateral mortgage obligations) and sold around the world.
Banks have what any business calls a cash flow and for banks that is the amount of deposits and withdrawals there are for any given day. At the end of the day they tally up the deposits against the withdrawals. More withdrawals means they have to put up cash to balance their account, conversely more deposits they have money to lend on the overnight market.
Hatha Sunahara
6th July 2010, 06:34 PM
If you do a little introspection, you will discover how difficult it is to adapt to change. You have to learn something that was familiar all over again. The biggest change comes very abruptly. It's that change that you experience when you leave the masses of propagandized slaves and join the ranks of the enlightened freedom lovers.
At some point you start to question how our current money system works. You look at money, and how it is created. The elite know we will do that at some point in our lives. So, they tell us nothing about it but what they think we should know, which is very little. And if we still ask questions, they prepare an obfuscatory piece like Modern Money Mechanics which directs your attention to the mechanics of the system, not to the logic or the equity of the system. I see it here on this thread with the MMM explanation repeated, uncritically. It makes it look like there are 10 or more steps to creating money. If you condense it down, you will see there is only one step. The question you are not supposed to ask, is when I borrow money, how much does the bank get, and how much do I get? MMM doesn't tell you that. You have to figure that out on your own. MMM is designed to dissuade you from doing independent examination, and accept what they tell you. Since it is complicated, you feel good about your effort to understand it, and believe you know all there is to know about money creation because you have mastered Modern Money Mechanics. This will keep you from going to the next step, which is understanding Modern Social Engineering.
So, what you know about money creation that comes from the Fed itself is something you should toss out. Assume it is telling you nothing about the agenda of the people who create the money. You will have to do some research of your own on what the agenda is. This willingness to do independent research is what separates the shepherd from the sheep. If you start doing that independent research yourself (remember, don't include anything from the Fed in that research) you will reach a point where you start to see things from the viewpoint of the shepherd. That is the moment of abrupt change. You are then no longer a sheep.
Most people are unwilling to leave the flock for a promotion. The transition is too much work and it is too stressful for them. But for those who do make the transition, there are moral choices to be made. Is it OK to exploit the sheep? Some people will say absolutely yes--the sheep are suckers and are good only for wool and mutton. Others will say, the sheep are human just like me. But you can't make this choice if you yourself are a sheep. You can only make it if you are a shepherd. So, you make a deal with a dog. One in a blue uniform, and another in a robe to remind the sheep that they are only good for wool and mutton. And when you become successful at managing sheep you develop a science called Social Engineering, but you never use that term because the sheep can look it up on the internet, and you've given the secret away for being a shepherd, and your sheep will run away. Or become shepherds just like you and kill you for mistreating them.
Does that explain why it is so hard for people to understand our monetary system? Or did I miss a few pieces, and you can't fill them in on your own?
Hatha
Gknowmx
6th July 2010, 06:51 PM
Hatha,
You are spot on... in describing our fiat monetary system. Maybe soon this thread will turn to how honest money is created. For now, baby steps.
thanks.
dysgenic
6th July 2010, 07:08 PM
I for one don't believe that there has ever been a bank that has failed based on bad loans that they've made. Investments in bad loans, sure.... big baller banks laying down the law and insisting they get run out of town or bought out based on pretense, sure..even collapsing deposit bases based on crises of confidence, but not bad loans. Again, they risk nothing when they get to loan out fake money that they don't even have (and in the case of collateralized obligations they stand to gain a whole lot based on 0 risk).
Hypertiger: "The banks are insolvent the minute they open their doors."
Question- why hasn't Fannie/Freddie failed yet? Because it's not in the best interests of the bad guys for them to fail. Why do banks still lend private money for student loans even though these loans hemoragge money? Because it's not in their best interests to stop.
They have as much money to lend as they need, and much more.
dys
Mouse
6th July 2010, 09:51 PM
If you do a little introspection, you will discover how difficult it is to adapt to change. You have to learn something that was familiar all over again. The biggest change comes very abruptly. It's that change that you experience when you leave the masses of propagandized slaves and join the ranks of the enlightened freedom lovers.
At some point you start to question how our current money system works. You look at money, and how it is created. The elite know we will do that at some point in our lives. So, they tell us nothing about it but what they think we should know, which is very little. And if we still ask questions, they prepare an obfuscatory piece like Modern Money Mechanics which directs your attention to the mechanics of the system, not to the logic or the equity of the system. I see it here on this thread with the MMM explanation repeated, uncritically. It makes it look like there are 10 or more steps to creating money. If you condense it down, you will see there is only one step. The question you are not supposed to ask, is when I borrow money, how much does the bank get, and how much do I get? MMM doesn't tell you that. You have to figure that out on your own. MMM is designed to dissuade you from doing independent examination, and accept what they tell you. Since it is complicated, you feel good about your effort to understand it, and believe you know all there is to know about money creation because you have mastered Modern Money Mechanics. This will keep you from going to the next step, which is understanding Modern Social Engineering.
So, what you know about money creation that comes from the Fed itself is something you should toss out. Assume it is telling you nothing about the agenda of the people who create the money. You will have to do some research of your own on what the agenda is. This willingness to do independent research is what separates the shepherd from the sheep. If you start doing that independent research yourself (remember, don't include anything from the Fed in that research) you will reach a point where you start to see things from the viewpoint of the shepherd. That is the moment of abrupt change. You are then no longer a sheep.
Most people are unwilling to leave the flock for a promotion. The transition is too much work and it is too stressful for them. But for those who do make the transition, there are moral choices to be made. Is it OK to exploit the sheep? Some people will say absolutely yes--the sheep are suckers and are good only for wool and mutton. Others will say, the sheep are human just like me. But you can't make this choice if you yourself are a sheep. You can only make it if you are a shepherd. So, you make a deal with a dog. One in a blue uniform, and another in a robe to remind the sheep that they are only good for wool and mutton. And when you become successful at managing sheep you develop a science called Social Engineering, but you never use that term because the sheep can look it up on the internet, and you've given the secret away for being a shepherd, and your sheep will run away. Or become shepherds just like you and kill you for mistreating them.
Does that explain why it is so hard for people to understand our monetary system? Or did I miss a few pieces, and you can't fill them in on your own?
Hatha
And will come to pass, when the sheep wake up, they will kill the dogs, claim victory and leave the pigs in charge:
Bleating and babbling we fell on his neck with a scream
Wave upon wave of demented avengers
March cheerfully out of obscurity into the dream.
Have you heard the news?
The dogs are dead!
You better stay home
And do as you're told
Get out of the road if you want to grow old.
Hatha Sunahara
6th July 2010, 11:07 PM
They have as much money to lend as they need, and much more.
Banks have a checking account that needs no deposits because the balance is infinite.
You can borrow money from that account, but you have to pay interest to the bankers to write you a check.
How did the bankers get this checkbook with an infinite balance? The Federal Reserve Act gave it to them. That is, the US Government gave it to them. Why them? Why couldn't the US Government keep that checkbook with an infinite balance flor its own use. Why did the US government allow the money system to be privatized?
Were all the politicians bribed or blackmailed to allow this? I think so. Are they still bribed and blackmailed to allow this even today? I think so. Perhaps all but one. John F. Kennedy. We all know what happened to him.
But very few of us are good at math and logic, and those who are are carefully watched in case they 'spill the beans'. Meanwhile everyone is blissfully ignorant, which makes them strong.
Hatha
jetgraphics
7th July 2010, 01:40 AM
We have lived under a state of emergency since 1933.
There has been no lawful money in circulation since 1933.
Federal Reserve notes are not dollars... they are promises (IOUs) to pay dollars - in the future.
FRNs were never "backed" by gold. If they were - they would be certificates, not notes.
And they are legal tender because 300 million enumerated "human resources" volunteered to be sureties (contributors) on them - and thus obligated parties. And an obligated party cannot object to the tender of "their" own note in lieu of lawful money.
Stop blaming the government or the FED - YOU GAVE CONSENT TO THIS MADNESS.
Did you ever read the "fine print" on that signature card you signed when you opened a "bank account" to engage in usury?
Did you note that you AGREED to abide by the RULES of the BANK?
Guess who the U.S. Governor of the "Bank" is?
Secretary of Treasury.
Do you know WHY that is a problem?
Title 22 USC Sec. 286a Appointments
(a) Governors and executive directors; term of office The President, by and with the advice and consent of the Senate,
shall appoint a governor of the Fund who shall also serve as a governor of the (World) Bank, and an executive director of the
(International Monetary) Fund and an executive director of the Bank.
...
(d) Compensation for services (1) No person shall be entitled to receive any salary or other compensation from the United States for
services as a Governor, executive director, councilor, alternate, or associate.
(2) The United States executive director of the Fund shall not be compensated by the Fund at a rate in excess of the rate ...
Secretary of Treasury = U.S. Governor of the Bank / Fund, and who shall not be paid by the U.S. government.
You have a contract with HIM and the powers he works for.
And no state can impair the obligations of a contract (Art.1, Sec.10, USCON)... and the Federal government certainly won't defend you.
Ash_Williams
7th July 2010, 06:53 AM
Again, they risk nothing when they get to loan out fake money that they don't even have (and in the case of collateralized obligations they stand to gain a whole lot based on 0 risk).
I still don't understand this 0 risk thing.
It would make sense if someone took a loan and did nothing with it except pay it back... maybe they wanted some $100 bills to take a ghetto photo of themselves in a turned baseball cap, flashing cash and holding a gun sideways.
But usually the deal is someone takes a loan for a house or something. The seller of the house gets paid. It wasn't fake money to him.
Let us say a mortgage happens. The seller gets 100k for his house and he is happy. He takes that money and buys 100 oz of gold (good deal).
The buyer makes one payment of $1000, and then loses his job. Next month, the bank forecloses on his house, and they sell it for 85k. The bank also gets a settlement with the buyer for 1/2 the balance, so 7k. It total, the bank gets 93k, but it has given the seller 100k. Who makes up the difference? Who paid for the 7oz of gold?
If the money is all fake and there is no risk, why don't they just loan a million dollars to everyone? Or a billion? They could loan me a billion dollars to buy a pair of binoculars, and if I didn't pay they could repossess the binoculars and be ahead on the deal because the billion dollars was all fake anyway.
dysgenic
7th July 2010, 08:39 AM
In poker, a freeroll is an entry into a real money tournament that the player doesn't have to put up an entry fee for. Because the player risks no money, he or she has everything to gain and nothing to lose. This is exactly what the banks are doing when they loan money. You can't lose what you don't put up. Again, the bank never puts up the money that they loan out. Do they put up real estate, gold and silver, even the cash in their vault in most cases when they make a loan? NO! They simply exercise their right to decree that their data entry is real money when it isn't.
Now, I'm sure that some ivy league puke with a half a million dollar education can create some convoluted accounting algorithm that makes it appear as if the bank takes a risk when they loan decreed money, but it's all smoke and mirrors.
There may be no risk to the banks when they lend money, but there IS a cost associated with the loan. The cost is price inflation, which everyone has to bear based on the present system. This is a riff on the old insurance scam, charge everyone just a little bit and no one will notice. Everyone has to pay the banks, whether you do business with them or not. You pay them everytime you buy something using an FRN.
dys
Again, they risk nothing when they get to loan out fake money that they don't even have (and in the case of collateralized obligations they stand to gain a whole lot based on 0 risk).
I still don't understand this 0 risk thing.
It would make sense if someone took a loan and did nothing with it except pay it back... maybe they wanted some $100 bills to take a ghetto photo of themselves in a turned baseball cap, flashing cash and holding a gun sideways.
But usually the deal is someone takes a loan for a house or something. The seller of the house gets paid. It wasn't fake money to him.
Let us say a mortgage happens. The seller gets 100k for his house and he is happy. He takes that money and buys 100 oz of gold (good deal).
The buyer makes one payment of $1000, and then loses his job. Next month, the bank forecloses on his house, and they sell it for 85k. The bank also gets a settlement with the buyer for 1/2 the balance, so 7k. It total, the bank gets 93k, but it has given the seller 100k. Who makes up the difference? Who paid for the 7oz of gold?
If the money is all fake and there is no risk, why don't they just loan a million dollars to everyone? Or a billion? They could loan me a billion dollars to buy a pair of binoculars, and if I didn't pay they could repossess the binoculars and be ahead on the deal because the billion dollars was all fake anyway.
Hatha Sunahara
7th July 2010, 09:17 AM
Ash_W try this on for size.
If you have a monopoly on conjuring up money out of thin air, it costs you nothing to do so. That is what fiat money is--money out of thin air. So you pull some money out of the air and you lend it to somebody and charge them interest. You are cashing in on this free ride you have. If the people who borrowed the money cannot pay it back, how does that hurt you? The money you loaned out cost you nothing. It didn't cost anybody anything. When the loan defaulted, what happened was the all the money in circulation became a little diluted. It became wortl just a little less that it was before the default.
So, ask yourself what gives the money value? The answer is that it is the work people do to earn that money. That's what make the money worth something. If the bankers lend out money that nobody works for, it introduces disorder into the system. That disorder destroys not only the value of the money, but the credibility of the bankers. That is the only risk the bankers take--there is no financial risk for the bankers under any circumstances. What they worry about is how much longer people will believe that the system they have works. How much longer they will be able to rob us of the value of our work by charging us interest. How much longer their usury will be undetected. If you deffault on a loan they take your collateral. They bear no risk. None. Zero.
Hatha
Bigjon
7th July 2010, 09:52 AM
Even though the money comes from thin air, it is given value when spent. The person called Jack received the check in exchange for his house has money to buy anything within the limit of that amount of money.
The operative part of the money scam is that as long as the banks can keep the money in expanded checkbook form the cost to the bank is relatively low.
When Jack wants to take his money in cash, the bank then has to bear the full brunt of the cost of that particular transaction.
But the banks main game is deposits and withdrawals of expanded money, so even though Jack cashed out of the system this cost is only seen at the margin after all the expanded transactions have been tallied up.
Ash_Williams
7th July 2010, 12:21 PM
That's all great.... so tell me, who paid for the 7 oz of gold? The seller of the house in my example bought 100 oz of gold using that thin-air money. The buyer of the house only covered 93 of those oz.
Ash_W try this on for size.
If you have a monopoly on conjuring up money out of thin air, it costs you nothing to do so. That is what fiat money is--money out of thin air. So you pull some money out of the air and you lend it to somebody and charge them interest. You are cashing in on this free ride you have. If the people who borrowed the money cannot pay it back, how does that hurt you? The money you loaned out cost you nothing. It didn't cost anybody anything. When the loan defaulted, what happened was the all the money in circulation became a little diluted. It became wortl just a little less that it was before the default.
Well it wouldn't cost me nothing to do so... but let's say it does. Now, I can just conjure up $1000... so why do I even do anything else? If I am capable of decreeing "here's $1000" then I'm not gonna bother giving out loans or doing anything. Why would I want $100 in interest? Heck I could just conjure another $100 and skip that bother.
Now, assuming I had to lend in order to conjure, why would I not lend to anyone and everyone? There's no risk, right? The more I lend the more I make. Woohoo.
You guys have to realize you're missing something here...
gunDriller
7th July 2010, 12:59 PM
You guys have to realize you're missing something here...
for me, that's an easy realization 8)
Hatha Sunahara
7th July 2010, 01:06 PM
People need a medium of exchange. They call that money. For a very long time that medium of exchange was gold and silver. Bankers could not conjure that up out of thin air, so they offered their services as 'repositories' for peoples' gold and silver. These repositories were called banks. You brought your gold or silver to this 'bank' and they gave you receipts for your gold and silver. You could spend these receipts because people accepted them. If they needed gold, they could just go to the 'bank' (which means 'table') and redeem the paper receipt for the gold and silver they needed. The bankers discovered that only 10% of the receipts were ever cashed for gold at any time, so, they started printing 90% more receipts than there was gold to back them up. People still spent them. The bankers loaned out 'money' that they had no gold and silver to back up. This was called fractional reserve banking.
The bankers went a step further in the 20th century. They printed 'receipts' for which there was no gold to back any of them, and people still spent those receipts. We know them as FRNs. The Federal Reserve Act in 1913 gave them a monopoly on creating this money.
The bankers create money--which is a 'social utility'--that is, they do it for others. If they did it for themselves, it would not be money and they would not be able to use it to exchange anything. Because they do it for others, they claim they need to be compensated for this 'service' they provide. So they charge interest, and much more than you would imagine because it is so difficult to see in the borrower lender relationship who gets what from the loan over the period of the loan.
Don't be fooled by the bankers. They appear to work for a living, but they do not. They sit behind their 'tables' (what the word bank means) and they do not work. They just exchange money with people. They are money changers. Everybody else works and produces something to get money. Bankers produce only money out of thin air, and it takes zero work to do that. In their system, the money is a way to transfer real wealth created by other people--those who work and produce into the pockets of the bankers on the pretext that they are providing a service. That service could be provided by the government for free--because money is a 'social utility'.
I should qualify this suggestion by recognizing that the current government we have, because it is so corrupt should not be empowered to create money until it is replaced, and the whole system is reformed.
Hatha
Hatha Sunahara
7th July 2010, 01:16 PM
And your last point Ash_W--why would you not lend to everybody and anybody if there is no risk in doing so?
Part of your function as a banker is to maintain the value of the paper money you do no work to create. The borrowers trust you. If you loaned out money that is not repaid, it means no work is done in exchange for that money, and the value of everyone else's money is reduced. There will be more money and less product in the economy, and everything will start to cost more. That is called inflation.
Conversely, if you do not create money by lending it, you will create a depression. That is when there is not enough money available for people to buy what they need, so prices will go down, and people will go out of business because they cannot make a profit producing anything.
Hatha
oldmansmith
7th July 2010, 01:21 PM
People need a medium of exchange. They call that money. For a very long time that medium of exchange was gold and silver. Bankers could not conjure that up out of thin air, so they offered their services as 'repositories' for peoples' gold and silver. These repositories were called banks. You brought your gold or silver to this 'bank' and they gave you receipts for your gold and silver. You could spend these receipts because people accepted them. If they needed gold, they could just go to the 'bank' (which means 'table') and redeem the paper receipt for the gold and silver they needed. The bankers discovered that only 10% of the receipts were ever cashed for gold at any time, so, they started printing 90% more receipts than there was gold to back them up. People still spent them. The bankers loaned out 'money' that they had no gold and silver to back up. This was called fractional reserve banking.
The bankers went a step further in the 20th century. They printed 'receipts' for which there was no gold to back any of them, and people still spent those receipts. We know them as FRNs. The Federal Reserve Act in 1913 gave them a monopoly on creating this money.
The bankers create money--which is a 'social utility'--that is, they do it for others. If they did it for themselves, it would not be money and they would not be able to use it to exchange anything. Because they do it for others, they claim they need to be compensated for this 'service' they provide. So they charge interest, and much more than you would imagine because it is so difficult to see in the borrower lender relationship who gets what from the loan over the period of the loan.
Don't be fooled by the bankers. They appear to work for a living, but they do not. They sit behind their 'tables' (what the word bank means) and they do not work. They just exchange money with people. They are money changers. Everybody else works and produces something to get money. Bankers produce only money out of thin air, and it takes zero work to do that. In their system, the money is a way to transfer real wealth created by other people--those who work and produce into the pockets of the bankers on the pretext that they are providing a service. That service could be provided by the government for free--because money is a 'social utility'.
I should qualify this suggestion by recognizing that the current government we have, because it is so corrupt should not be empowered to create money until it is replaced, and the whole system is reformed.
Hatha
A very good synposis that even a sheeple could understand, thanks.
Hatha Sunahara
7th July 2010, 01:28 PM
There is so much deception, confusion and obfuscation in this system that it is a no-brainer wyh people have so much difficulty comprehending it.
If you accept that there is all this deception, and you want to find the truth, you have to look for it yourself. If you don't, even people who are telling you the truth will appear to be deceiving you.
And if the bankers have convinced you that there is no such thing as truth, then you are truly deceived.
Hatha
Bigjon
7th July 2010, 03:06 PM
Well I have to side with ash on this, if the bankers money has no worth what do you use it for?
Why do bankers go broke?
Even though the money comes from thin air, once conjured into being it does have value and that is why you use it.
Gknowmx
7th July 2010, 04:13 PM
People need a medium of exchange. They call that money.
Ah, this is where it starts to get interesting. Folks confuse the concept money with the concept of currency. Money is debt. Money is a contract where the owner of a present good exchanges it for the promise of the delivery of a future (currently non-existent) good by the borrower. The medium of money is time; there is always risk that the future good will not be delivered (hence the incorporation of the concept of Interest within the concept of Money). Money attempts to preserve value from the present tense to the future tense. By definition, money is an abstract concept. Put to real-world physical practice a contract is tangibly written. Any assignable contract could act as a medium of exchange. The properties of Gold make it the best tangible medium of exchange to approximate the constant value of money (through time). We like to say that "Gold is money", but really that is a sloppy extension of to fact that "Gold is currency".
Each of us can create money at will; we do it all the time when we enter contracts. It is our ability to produce, to be productive, that allows us to create our own money. There is no absolute need for bankers or fiat money. The key is to understand what honest money really is; to separate the concept of money from the immoral practice of banking and the current usurious monetary system.
Bigjon
16th July 2010, 12:57 PM
It was unclear what was happening in your explanation as you failed to specify what the lender and the borrower are doing. English is a horrid language for explaining anything beyond the caveman's 'subject verb object'. That said, if my understanding of your response is correct, the the bank cuts a cheque to the borrower and that deposit is created.
However, the website failed to explain why a bank can 'create a deposit' out of thin air, it would have to be debited from the bank's account and a reserve (be it 0, 3, or 10%) moved to the Fed. If they were able to create deposits ex nihilo, no bank would go under and the expansion of credit would be infinite, ergo that scenario is absurd.
Instead, what is happening is just a step in the process of the money multiplier effect: a loan is made from deposits, a reserve is held at the Fed, repeat.
No, the loan is not made from deposits. The loan is created out of thin air. The loan is a number in an account. If they gave joe bloe money from their deposits they would have to subtract from those deposits and you wouldn’t be very happy when you got your statement that said we had to loan some money to joe bloe, so we took it from your account.
The loan is most likely subject to a 3% reserve. That reserve is what stops banks from creating money willy-nilly.
However during the last ten years as fast as banks made loan they sold them and got them off of their books. These loans were turned into CMO’s (collateral mortgage obligations) and sold around the world.
Banks have what any business calls a cash flow and for banks that is the amount of deposits and withdrawals there are for any given day. At the end of the day they tally up the deposits against the withdrawals. More withdrawals means they have to put up cash to balance their account, conversely more deposits they have money to lend on the overnight market.
Apology’s to Skirnir, I screwed up when I said the bank doesn’t lend from deposits. That is in fact the standard place that banks derive the money they lend.
They can also lend money based on an individual putting up earnest money for a loan.
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