How do you convince a PhD grad that fractional reserve debt-based money is bad?

[Filthy Keynes]

How do you convince a PhD grad from Princeton that fractional reserve debt-based money is bad?

My brother can not see the folly of the following:

Fractional Reserve
Debt based money
Keynesianism
Fiat currency

How do I help him?

Here is my latest conversation:



Him:
> Will this statement help you to relax: the sum of all debts and credits is zero.




Me:
If I deposit one dollar in a bank, and they loan out nine dollars (leveraging up that one dollar 9x, or having a 1:10 reserve ratio) then the sum is not zero. There is nine times as much debt as there are assets to pay off the debt. Right? It’s musical chairs where nine people will find themselves chair-less and only ONE can claim that dollar as asset.




Him:
No -- what I meant is that the sum of all debts and credits is zero. So the bank has $1 debt to you and you are a $1 creditor: $1 - $1 = 0. People owe the bank $9 and the bank is a $9 creditor $9 - $9 = 0. The numbers all cancel. There is no creation of debt. If the debtors pay interest or borrow more, that does not affect the total sum which remains zero.

Or are you concerned about leveraging and the result when a debtor fails to pay his debts? It is certainly true that leveraging adds risk to a system, and the higher the leveraging the higher the risk that some debtors fail to pay that will lead to a domino effect. But that is not what you described at the bottom of this email which indicates a growth of debt due to interest.

Of course if a debtor borrows to pay his interest, then he will get into worse debt. And it is true that at a certain stage a borrower will be insolvent. But that is purely because the debtor is not servicing his debts (i.e. borrowing to pay interest). Anyone who does that can expect trouble in not too long.

Our country certainly has a large debt. The answer to that is not to go to a gold standard, which won't fix it (or anyone's debt for that matter), but to start paying back our national debts by taxing at least the amount we spend. To me that is common sense. Then the government will be solvent and not have an increasing debt. No matter what currency we have, that is the only stable long term solution. Do you agree?


Everything I say comes back with a smart-than-thou response. How would you handle this situation?

[Gaillo]

I'd personally go find someone equipped with a brain to continue the conversation with.

[G2Rad]

my favourite quote is: Strange as it seems, no amount of learning can cure stupidity, and higher education positively fortifies it

on a serious note, the island example did the trick for me personaly

[G2Rad]

http://www.youtube.com/watch?v=eLjZPTbRdG4&p=EC5CD5F94E84E5E9&index=1&feature=BF

[Korbin Dallas]

Doesn't PhD stand for Pile it Higher and Deeper? ;D

[Filthy Keynes]

on a serious note, the island example did the trick for me personaly


Island example?

[keehah]

Ponzi-scheme economic system with exponential population overshoot meets stable or declining resources.

[Gaillo]

Doesn't PhD stand for Pile it Higher and Deeper? ;D


College Degrees Explained:

BS - Bullshiit
MS - More Shiit
PHD - Piled Higher and Deeper

[G2Rad]

have him read this:

One of our major moron factories gets in trouble (http://gold-silver.us/forum/general-discussion/one-of-our-major-moron-factories-gets-in-trouble/)

[General of Darkness]

Fractional reserve banking is the epicenter of Usury.

It's basically loaning out money that doesn't exist with interest.

It's a jewish wet dream, that isn't a dream but a fact.

It can be argued on both sides, but at what point does it become moral and responsible? The answer is that it just becomes unmanageable.

The real problem is the increase in populations. In a rational society wealth is a finite number, in a usurious one that number is infinite.

WHY DO YOU THINK THEY'RE ALLOWING ILLEGALS INTO AMERICA.

They're thinking is more bodies, more debt, and that works great in a fractional reserve banking system. We can loan out more money that we don't have.

CONSUME CONSUME CONSUME.

[ShortJohnSilver]

You probably will not be able to.

However if you want to keep trying, you could ask him how it is that $100 could be loaned, with a requirement that next year, $105 would be paid back, if the sum total of all money printed was $100 .

Further, you should ask him what the risks are in the leveraging he is talking about, if everything cancels out?

[G2Rad]

on a serious note, the island example did the trick for me personaly

Island example?


yes. it is so simple, even kids can get it

here it is: http://www.michaeljournal.org/myth.htm

[Hatha Sunahara]

Why do you need to convince him of anything? If he needs convincing, he needs to convince himself.

What the Ivy League schools do is inject a bias in the thinking of their students. The schools will lead their students to believe that Usury is good and useful. They do it by never using the word usury, nor fully explaining the money system so that a logical, rational mind can grasp the process and make moral judgments about it. By injecting their own biases into the thinking of their students, they make their graduates stupid. One way to overcome that conditioned stupidity is to spend a little time at a forum like GSUS. My opinion however is that it is a lot safer to be stupid and not challenge the people who are using the system to screw you. The minute you give an indication that you know what TPTB are doing, your life starts to change in ways you don't want. It's better from a pragmatic view to be ignorant and blissful. Even if you are a slave to usury. There's not much we can do about this money system. The best that can happen if we know how rotten it is, is that we will be forever hopeful that they system will self-destruct and be replaced with something less evil. And if you know how rotten the system is, you can't 'un-know' it easily. Knowing it is like opening Pandora's box. Ignorance is safer, smarter, and better for most people. Don't disturb a good thing.

Hatha

[MNeagle]

And don't bring it up at Thanksgiving either!!

[Uncle Salty]

I quit trying to convert others.

Just focus on your own preps.

Life is too short to teach pigs to dance.

[Glass]

Why do you need to convince him of anything? If he needs convincing, he needs to convince himself.

What the Ivy League schools do is inject a bias in the thinking of their students. The schools will lead their students to believe that Usury is good and useful. They do it by never using the word usury, nor fully explaining the money system so that a logical, rational mind can grasp the process and make moral judgments about it. By injecting their own biases into the thinking of their students, they make their graduates stupid. One way to overcome that conditioned stupidity is to spend a little time at a forum like GSUS. My opinion however is that it is a lot safer to be stupid and not challenge the people who are using the system to screw you. The minute you give an indication that you know what TPTB are doing, your life starts to change in ways you don't want. It's better from a pragmatic view to be ignorant and blissful. Even if you are a slave to usury. There's not much we can do about this money system. The best that can happen if we know how rotten it is, is that we will be forever hopeful that they system will self-destruct and be replaced with something less evil. And if you know how rotten the system is, you can't 'un-know' it easily. Knowing it is like opening Pandora's box. Ignorance is safer, smarter, and better for most people. Don't disturb a good thing.

Hatha



They call it Economics, I can't remember if it's macro or micro but I do remember it's called Opportunity Cost. What is the cost if I take the opportunity today or if I wait and take that opportunity some time in the future? You could also call it Whimpy economics. I'll gladly pay you tuesday etc etc. That's how they sell it. Debt is good. We need debt to expand the economy. Now that is technically correct when you have a debt economy but if you had a savings based economy how would it work? Who knows? No one at university knows thats for sure.

Also people would much rather have 1,000,000 credits/FRN's than 100,000 dollars gold with the same purchasing power because 1,000, 000 is much bigger than 100,000 so it's better right?

You try and argue for a gold standard and there isn't enough gold to go around to cover the billions of wealth people have in credits/FRNS is usually the argument you will get. You couldn't possibly do it.

Explaining that the gold version of money will probably add up to less numbers but have more buying power so it works out the same just doesn't seem to be comprehensible to anyone. People like being millionaires of nothing but imagined value instead of thousandaires of substance. The emporer will defend those new clothes to the end.

Another funny thing is the game Monopoly. Nearly everyone has played it. In my experience nearly everyone hates it after playing just a few times. The reason for this is because it's un-win-able unless you are the guy who controls the bank or is the lender. Sometimes we played with out the bank being a lender but any player who became a lender becomes the bank by default.

Who wins everytime? The bank. Why? Because the game has a fixed amount of money. Of course you can start a ledger but this just increases the debt levels. At some point it stops working as a game. There is no difference between that game and fiat assisted real life. None what so ever.

[uranian]

sounds like his head is willingly in the sand, and i agree that it's not your place to remove it for him. i do however understand the motivation!

couple of quotes that are pretty crystal to me:


We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample syntheticmoney we are prosperous; if not, we starve. We are absolutely without a permanent money system. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.

Robert H. Hamphill, Atlanta Federal Reserve Bank


The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple that the mind is repelled.

John Kenneth Galbraith, Money: Whence it came, where it went - 1975

[Neuro]

Just laugh at him when all his life schooling becomes worthless with the collapse of the monetary system!

[Cebu_4_2]

If he can't see it then the education has done it's job. This is what current education is ALL about.

[PatColo]

"Money As Debt" - 48 mins, animated, even a phd can follow it. I like how it's peppered with key historic quotes alluding to how dark the system really is, where it's heading,

http://video.google.com/videoplay?docid=-2550156453790090544

[Bigjon]

haha here we go again, banks spend money too.


Everyone ignores the fact that bankers collect interest so they can buy things. When they buy things the money that you paid for the interest portion is returned to the pool of money called "the economy".

Where you can fetch it again through your labor like a good little doggy and return it to your master the bankster.

Another illustration:

Assume an island with only two people, one with nothing and one with all the wealth. The wealthy man has various tools, all the land and assets including 100 gold coins which are the only coins on the island.

Suppose the man with nothing makes a deal with the wealthy man in the hopes of bettering himself. He takes a loan from the wealthy man for 100 gold coins with a promise to pay back 110 gold coins in 5 years. Now it might seem to some that the poor man was fooled because the island only has 100 gold coins and to pay back the loan it would seem there needs to exist 110. However there is actually no problem because work itself has value.

Here is how the impossible loan payback happens:

The man uses his 100 coins loan productively to buy land, tools, etc. from the rich man. He works and produces food and other things of value which he sells to the rich man for 23 gold coins a each year. Each year he pays 22 coins toward the loan and keeps 1 himself. The number of coins always remained the same yet in 5 years the man paid off his 110 coin debt and owns land, tools, and 5 gold coins. The rich man has 95 coins plus the items of value the man produced with his work. The poor man's work added value into the closed island system that makes up for the loan interest plus more.

People forget that the coins are only representations and storage of work/value--in the end work is what produces the real value.

The little story is also a good example of how not all debt is bad. Productive debt can be good.

[Libertarian_Guard]

Filthy Keynes

These people are impossible. The big lie about government bonds being a rock of gibraltar for the worlds finances is all they will ever believe. They can't see fiat currency as a ponzi scam. Even with the piss poor record of how every fiat is continually debased! They live in a world were bonds are God in their mind.

[Silver Shield]

Don't talk to sheeple there is no upside...
If you talk to them before the paradigm shift, they will frustrate you.
After the paradigm shift, they will be zombies looking for your brains.

[BillBoard]

He has been conditioned not to comprehend that Usury is wrong.

In short, don't waste your time since you are asking him to question everything he has been taught.

Do yourself a favor, use your time more wisely and prepare for the coming crunch.

Make a lot of connections and "friends", do some volunteer work at a hospital where you can meet doctors and interns, knowing them will come in handy in the very near future.

[Ash_Williams]

You can't. You're too far apart. You've already decided that you're right and that he's a mental defective because he's a PhD. He's decided that he's very smart and your education consists of watching biased goldbug movies online.

I've heard the argument from the videos plenty of times. The debt never gets paid off, the banks take no risk, etc. I used to believe it once. I can admit I was wrong though.

Where his answer falls apart is at the end where he suggests higher taxes could pay off the debt. That's not true. The debt can't be totally paid off anyway, so the closest we can get is to have as much money as lent at the same rate of interest as money we have borrowed. The only way that can happen is by increasing productivity and exports. Higher taxes won't do that. There's a quote that should go here about taxing yourself to prosperity being like standing in a bucket and trying to pick it up.

[mamboni]

The bank and the citizen start with nothing. The citizen loans $1000 from the bank and the bank creates a ledger entry for $1000 which is by definition an asset. At time zero, the $1000 of credit is equal to but a mirror image of the bank book entry of $1000. If these are combined, they net zero. But, once time commences so does the interest charge. At that point, the bank is acquiring assets for doing nothing productive because the asset book entry grows. The citizen must labor, invent, service or produce and generate income sufficient to cover the interest charge. Imagine this same scenario over millions of citizens and thousands of banks and hundreds of hours. It is a scam pure and simple because the citizens, by accepting the 'worthless' credits of the bank, have imputed value on those credit through their collective labors and enterprise whilst the bank produces nothing of value. In fact, the bank is a parasite to the citizens. If at some point in time, the bank ceases to lend yet compels the citizens to service their debts held by the banks, all credits in circulation will in time disappear into the bank account books. The original [i.e. $1000] ledger entry will disappear as if it never existed. Yet, a new ledge item the interest charge, remains on the bank ledger as outstanding and a charge to the citizen. The citizen holds no credit but holds the products of his labors. The bank now demands those products to satisfy the outstanding interest debt. The citizen must comply because the credits, not being tied to any commodity such as gold, now have value equal to all products and services outstanding under this bank-controlled scheme. In the end, the citizen has nothing (save for any skills or wisdom gained) and the bank owns all the goods and services. Like I said, such a bank is a scam to purloin the wealth and labors of the people. The fractional reserve amplification mechanism greatly accelerates the rate at which the people's wealth and labors are stolen.

[chad]

i just stopped trying. it's like stephen hawking trying to explain his job to an ant. the ant just wants to run around, not understand how the universe works.

[Ash_Williams]

That assumes a bank that has no expenses and some evil goal of owning everything.

In reality the banks spend wastefully and have no desire to own anything except paper. The first thing a bank does when it find its self owning anything physical is to auction it off, often at a loss. The CEO doesn't want your 2003 Toyota that you missed 5 payments on or your massive poorly-built house squeezed onto 1/18th of an acre that you couldn't afford.

[mamboni]

That assumes a bank that has no expenses and some evil goal of owning everything.



The only 'expenses' the banks have are the CEO and officer salaries and bonuses and dividend payments to the stockholders. The rest is chicken feed. As to your latter point: the banks already own virtually everything, except perhaps the silver and gold in your pockets and the few unencumbered items you own. There is no other mission or goal for a bank than to acumulate wealth. The ultimate goal is to own/control ALL wealth. You call it evil. The banks call it 'business.'

[gunDriller]

i recently had a friend's friend with a phD tell me, "in order to speak with authority, you have to have a phD".

for some people, a phD is like a form of mental illness.

[Ash_Williams]

Well, if you take bank of america's finance sheet for 6 months they have the following (I rounded and listed the biggest stuff only).

Interest Income: 26.7 Billion
Non-interest Income (insurance, trading, service charges): 34.4 Billion

Interest Expenses (they borrow too): 12.4 Billion
Personnel (wages and bonuses): 17.95 Billion
Other expenses that aren't wages (like rent, equipment, phone lines, etc.): 17 Billion
Income Tax: 1.9 Billion
Dividends: 5.6 Billion

Bonuses are supposed to be around 4 Billion, leaving 14 B to pay about 285,000 workers. That averages out to 50k per employee.

They spend billions to take in billions. You can't really say the bank is just a giant black hole sucking up all the wealth. The bank is nothing on its own, just a name, it's only the people gaining wealth. If anything, it redistributes the wealth from the stupid to it's employees and shareholders.

I don't see how the bank owns everything I have. I took no mortgage for my properties or vehicles or education or anything. I never felt it necessary despite starting out totally broke. If you work, you will get money - there is no need to borrow it.

[mamboni]

i recently had a friend's friend with a phD tell me, "in order to speak with authority, you have to have a phD".

for some people, a phD is like a form of mental illness.


Unfortunately, when you hold a degree, people tend to take what you say more seriously; this is more so a characteristic of the older generations and less so the young who tend to be irreverent. I hold several postgraduate degrees but I never advertise this to those who don't know me. But those who do know me take the advise I give very seriously - so I try to be earnest and responsible in what I say and do. Of course, education has little to do with innate intelligence. Nevertheless, people tend to judge you by the clothes you wear, words you use and degrees you hold.

[Dogman]

i recently had a friend's friend with a phD tell me, "in order to speak with authority, you have to have a phD".

for some people, a phD is like a form of mental illness.


To most academicians.

That have never held a real job and have not a clue of what really working for a living is.They are the only smart ones that count, it is the us/them. They are the ones that count, and we are to them the unwashed masses.

[mamboni]

Well, if you take bank of america's finance sheet for 6 months they have the following (I rounded and listed the biggest stuff only).

Interest Income: 26.7 Billion
Non-interest Income (insurance, trading, service charges): 34.4 Billion

Interest Expenses (they borrow too): 12.4 Billion
Personnel (wages and bonuses): 17.95 Billion
Other expenses that aren't wages (like rent, equipment, phone lines, etc.): 17 Billion
Income Tax: 1.9 Billion
Dividends: 5.6 Billion

Bonuses are supposed to be around 4 Billion, leaving 14 B to pay about 285,000 workers. That averages out to 50k per employee.

They spend billions to take in billions. You can't really say the bank is just a giant black hole sucking up all the wealth. The bank is nothing on its own, just a name, it's only the people gaining wealth. If anything, it redistributes the wealth from the stupid to it's employees and shareholders.
I don't see how the bank owns everything I have. I took no mortgage for my properties or vehicles or education or anything. I never felt it necessary despite starting out totally broke. If you work, you will get money - there is no need to borrow it.


Thank you for an excellent conclusion! It appears that we are in perfect agreement! ;D ;D ;D

[Awoke]

He stated in no uncertain terms that "There is no creation of Debt".

He obviously doesn't understand what fractional reserve lending is.
9 to ratios create debt. (Deriviatives ratios are mindblowingly higher than 9:1!!)

Give him 10 peanuts. Then tell him he owes you 12 peanuts. Then tell him that he can't get any peanuts from anyone else in the world except from you.

He can't repay you 12 peanuts.

Loan him 2 more peanuts.

Tell him he will owe you three in return. Same conditions apply.

If he doesn't get it then, tell him to shove his PHD up his ass.

[Bigjon]

Banks are a time machine that allow you spend now, what you can earn later and for that the bank deserves a profit.

If you have a good business plan and you need money to accomplish your goals, borrowing from a bank makes sense and is NOT STUPID.

If you want to throw a big party and don't have the money and you borrow it, you are stupid.

[Ponce]

You don't have to know the meaning of something to know what is going on......just like I am not an engineer to know that the twin towers and bldg 7 came down with demo and on purpose.

Have your brother come and stay with me for a week and I will change his mind......either he will walk away from here with an open mind or a crazy mind.....it would depend as to how receptive he is........I for one don't "study" something but simply absorbe it and then let it work out itself in my mind.

On another note.......there are 6,750 different languages in the world and one language dies every two weeks, a new language was just foud which is spoke by about 1,000 people, that's the KARA language whos people live in a corner of India.

[Awoke]

He stated in no uncertain terms that "There is no creation of Debt".

He obviously doesn' understand what fractional reserve lending is. 9 to ratios create debt.

Give him 10 peanuts. Then tell him he owes you 12 peanuts. Then tell him that he can't get any peanuts from anyone else in the world except from you.

He can't repay you 12 peanuts.

Loan him 2 more peanuts.

Tell him he will owe you three in return. Same conditions apply.

If he doesn't get it then, tell him to shove his PHD up his ass.



I would like to add that this is also how they use "foreign aid" to enslave countries. Make loans that they can't repay back, and them loan them the money that they need just to make the interest payments.

Of course, the second loan that they will use to pay off the interest will have more interest debt attached to it, and so on. It is exponential.

Also bear in mind that your buddy probably doesn't know that a bank considers a loan as an "asset" and that they enter it in their ledger as an asset in the green column.

That would be like me loaning you 10 peanuts with the interest of 2 more peanuts like above. Since I loaned them to you, I consider you a "good borrower", and therefore I can "depend" on you to repay me, so I know I will be getting those 12 peanuts from you sometime in the future.
Therefore I will enter it in the green asset column.
(Even though I have loaned out the 10 peanuts, so I am short 10 peanuts in my holdings, so you would think I should mark that down in the red liability column)

Since I have 12 peanuts added to my assets column, I can afford to loan out more peanuts to other suckers, leveraging on a 9:1 ratio. However, I only have a certain amount of actual physical peanuts, so I give you paper ones instead. But people accept them as real peanuts at face value.

This is why the PM standards were removed from the currency. This is why "money" doesn't technically exist. It's all electronic ledger entries that enslave us to the labour system and keep our heads down to the grindstone, ensuring we don't have too much time to talk or think or come up with ideas that might be anti-establishement.

If your buddy actually wants to learn something about the system, get him to read The Creature from Jekyll Island.
If he won't it's because he doesn't want to know the truth.

[Awoke]

Last thing I would like to add on the subject: Harvard is an inculcation center for TPTB. Every professor in that place is hand picked and not one professor is anti-establishment. They will tow the line they are told to tow, and teach the curriculum that TPTB dictate to them, such as global warming, etc.

Harvard and all other "prestigious" universities are inspired by the Tavistock Institute of Human Relations, and most are under teh control or influence of the Fabian society.

He will only be taught what the globalists want him to be taught at a university such as Harvard. Consider him brainwashed to the absolute highest degree. That is the purpose of the "education" system at it's core.

[PatColo]

Also bear in mind that your buddy probably doesn't know that a bank considers a loan as an "asset" and that they enter it in their ledger as an asset in the green column.


This reminds me, there was a "Money As Debt II: Promises Unleashed (http://www.google.com/search?q=Money+As+Debt+II%3A+Promises+Unleashed&tbo=p&tbs=vid%3A1&source=vgc&aq=f)" released 1-2 years ago, gets much deeper into the often confusing & counter-intuitive internal accounting methods of banks. 77 mins, & generally much more advanced than the 48 min original. It hasn't gotten much publicity, even at honest money forums etc. I watched it once with divided attention, and figured I'd revisit it later but haven't. I recall at the end it proposes a "digital global currency" with a verifiable (internet based?) money-supply control method via currency-unit serial numbers. It was either interest-free or very low interest (don't recall). It wasn't a gold/hard-commodity backed currency, which may be why it wasn't a big hit at gold bug sites.

Prolly worth its own thread, certainly worth watching once- but with undivided attention, maybe even a notepad by your side and a finger on the PAUSE button, coz I recall it moved pretty quick and packed a lot of stuff in. I'll add re-watching it to my to-do list and maybe start a thread on it later.

[Filthy Keynes]

Awoke,

Thanks for the analogy of peanuts. It makes sense to me (or doesn't make sense as the case may be), but *I* get it. Oh, and he is my brother, so I can't really tell him to shove it up his ---! ;)

[Awoke]

I've said that to my brother before! LOL

;D

[Ash_Williams]

Also bear in mind that your buddy probably doesn't know that a bank considers a loan as an "asset" and that they enter it in their ledger as an asset in the green column.

That would be like me loaning you 10 peanuts with the interest of 2 more peanuts like above. Since I loaned them to you, I consider you a "good borrower", and therefore I can "depend" on you to repay me, so I know I will be getting those 12 peanuts from you sometime in the future.
Therefore I will enter it in the green asset column.
(Even though I have loaned out the 10 peanuts, so I am short 10 peanuts in my holdings, so you would think I should mark that down in the red liability column)

A loan is an asset because it is a promise by someone to pay $x. It's like you buying a GM Ford bond. You'd probably consider it an asset.

So someone promises the bank 12 peanuts in a year, if they'll lend him 10 peanuts now, and signs a paper saying so. The bank gives him a certificate for 10 peanuts (either paper or digital). He then buys a coconut with that certificate. Now the person who sold the coconut puts that certificate in his bank (let's say it's the same bank).

The asset for the bank is the note promising 12 peanuts. That's worth anywhere from 0 to 12 peanuts to them depending on market conditions.
The liability for the bank is the certificate for 10 peanuts. The bank has a promise to give that coconut seller 10 peanuts.

What makes it work is that the bank will pay a peanut in exchange for a coconut cookie, that's how the 2 peanuts is accounted for. If a bank simply swallowed up all it could it wouldn't work. The bank could reposes the guy's coconut but that's not their goal, they don't want a coconut any more than they want crappy houses or cars. The just want the revenue stream, in dollars or peanuts or whatever.

[madfranks]

Awoke, regarding your analogy with the peanuts.

Let's say the guy who the bank loaned 10 peanuts to was a tailor, and the banker needed a new suit. A new suit costs 2 peanuts, so the tailor uses his time, labor, and resources to make the banker a new suit. The banker pays him 2 peanuts, giving him a total of 12 peanuts with which to repay the loan. Look at it this way, for the privilege of loaning him 10 peanuts, the bank got the 10 peanuts back plus a new suit. And the tailor had to use his time, labor, and resources to pay the interest.

[Libertarian_Guard]

I see the old analogy about bankers writing a number on the back of a cocktail napkin ( with help from the Treasury Department ) and calling it money are passé, and peanuts are the new metaphor of choice. I'm so outdated it's not even funny. Anyhow, "working for Peanuts is all very fine, but I can show you a better time"

http://www.youtube.com/watch?v=8Ts2U1mkfz4

[Joe King]

Awoke, regarding your analogy with the peanuts.

Let's say the guy who the bank loaned 10 peanuts to was a tailor, and the banker needed a new suit. A new suit costs 2 peanuts, so the tailor uses his time, labor, and resources to make the banker a new suit. The banker pays him 2 peanuts, giving him a total of 12 peanuts with which to repay the loan. Look at it this way, for the privilege of loaning him 10 peanuts, the bank got the 10 peanuts back plus a new suit. And the tailor had to use his time, labor, and resources to pay the interest.

Therein lies what it is all about.
i.e. getting you on that treadmill to produce all the stuff needed to run the World that the elite sit on top of.

If it weren't for fractional reserver banking, we'd have a lot less "stuff" around.




All the banks are doing is facilitating our ability to use our own future earnings today, so that we might get benefit of those future dollars now as opposed to having to save up slowly over the course of 30 years in order to get that house which we desire now.
Which is the way everything from roads to buildings to places like DisneyWorld get built.


The problem comes in when the future earning potential fails to keep pace with yesterdays promises to pay in that future.
Which is where we're at.
Unless of course a new bubble can be inflated so as to further put off the inevitable.

[sirgonzo420]

Awoke, regarding your analogy with the peanuts.

Let's say the guy who the bank loaned 10 peanuts to was a tailor, and the banker needed a new suit. A new suit costs 2 peanuts, so the tailor uses his time, labor, and resources to make the banker a new suit. The banker pays him 2 peanuts, giving him a total of 12 peanuts with which to repay the loan. Look at it this way, for the privilege of loaning him 10 peanuts, the bank got the 10 peanuts back plus a new suit. And the tailor had to use his time, labor, and resources to pay the interest.

Therein lies what it is all about.
i.e. getting you on that treadmill to produce all the stuff needed to run the World that the elite sit on top of.

If it weren't for fractional reserver banking, we'd have a lot less "stuff" around.




All the banks are doing is facilitating our ability to use our own future earnings today, so that we might get benefit of those future dollars now as opposed to having to save up slowly over the course of 30 years in order to get that house which we desire now.
Which is the way everything from roads to buildings to places like DisneyWorld get built.


The problem comes in when the future earning potential fails to keep pace with yesterdays promises to pay in that future.
Which is where we're at.
Unless of course a new bubble can be inflated so as to further put off the inevitable.



http://3.bp.blogspot.com/_pCDyiFUv9XU/Sb0s3YMa9gI/AAAAAAAACvc/6Ed3xmaWw8c/s320/wimpy.jpg

[Twisted Titan]

i recently had a friend's friend with a phD tell me, "in order to speak with authority, you have to have a phD".

for some people, a phD is like a form of mental illness.


Unfortunately, when you hold a degree, people tend to take what you say more seriously; this is more so a characteristic of the older generations and less so the young who tend to be irreverent. I hold several postgraduate degrees but I never advertise this to those who don't know me. But those who do know me take the advise I give very seriously - so I try to be earnest and responsible in what I say and do. Of course, education has little to do with innate intelligence. Nevertheless, people tend to judge you by the clothes you wear, words you use and degrees you hold.


Judge me by the coinage in my pocket as it certainley different then the masses.

[Filthy Keynes]

Joe King and Awoke,

Very good posts! Thank you for making this clear.

[Filthy Keynes]

What if the guy who owed 12 peanuts paid back the 10 he had (the bank now has 10 and he has nothing but owes two)...

...but then borrowed two more peanuts and owed something like 2.1 peanuts....
...but then borrowed 0.1 more peanuts and owed something like 0.001 peanuts....
...but then borrowed 0.001 more peanuts and owed something like 0.00001 peanuts....

Etc. He could ~effectively ~ pay off his loan PLUS the interest if he did it to the nth degree, right?

Maybe we really can "borrow our way out of debt" if we borrow the money to pay the interest ad infinitum?

This assumes that he didn't spend the money - but who borrows money with the intention of not spending it?

[Joe King]

What if the guy who owed 12 peanuts paid back the 10 he had (the bank now has 10 and he has nothing but owes two)...

...but then borrowed two more peanuts and owed something like 2.1 peanuts....
...but then borrowed 0.1 more peanuts and owed something like 0.001 peanuts....
...but then borrowed 0.001 more peanuts and owed something like 0.00001 peanuts....

Etc. He could ~effectively ~ pay off his loan PLUS the interest if he did it to the nth degree, right?

Maybe we really can "borrow our way out of debt" if we borrow the money to pay the interest ad infinitum?

This assumes that he didn't spend the money - but who borrows money with the intention of not spending it?




That's what they've already been doing all along. {but they've also been borrowing extra "peanuts" along the way, too}

It works until, as I previously posted, the future earnings needed to pay yesterdays promises to pay turn out to be less than they were anticipated to be when those promises were made.
Which is where we are now, as a Nation.
Which is why they need a new bubble to inflate.


As far as your brother goes, what I'd tell him is that all monetary systems such as ours evenutally fail and that alone is reason enough not to use such a system, as it dooms the generation that happens to find themselves holding the bag with no one to pass it off to.
Whether that generation is ours or not, is still yet to be determined.
But even if it's not, what about the ones that follow?
F' 'em?
They're on their own?
That'll teach 'em to listen to their elders? {hahaha}


Why would anyone who presumably cares about their Nations future well being impliment such a system?
...and yea, I already know the answer to that question.

[iOWNme]

Dont take this personal.....

If he graduated and has a PHD, especially from a upper echelon school he is a Socialist/Communist BY DESIGN.



I would start with defining those terms to him, and he will see real quick what the truth is. As a Central Bank is the 5th Plank of the Communist Manifesto, and has been used by ALL Socialist countries. Once you can get him to admit they are evil, he will be forced to face his opinions in a different light.

Graduating all students, at the same time, with the same degree, is a Communist ideology as well......It is the TRUTH.

He may not like it, but you cant help him with that.

[TheNocturnalEgyptian]

Using your brothers example of "The numbers all cancel," What about the interest? The interest is generated on money. So $1 loan = $1.06 due. So 1.06-1.00 is .06. Where does the .06 come from? Numbers do not all cancel.


But just because they don't cancel, doesn't mean it's impossible to pay. Bigjon is correct in this matter. You use your LABOR to make up the difference. Even in a finite system, it's possible to service debts this way, and it makes sense, because labor is the desired result of a currency/token.


So you have a system where people are charged a % of their labor for the privledge of using currency. Accept that at it's face.

Add to that the fact that it's mathematically impossible for everyone to service their debts at the same time, and you start seeing the evil.

Again, I repeat - it is MATHEMATICALLY IMPOSSIBLE for there not to be someone, somewhere, who defaults and has their property seized. Just because we can make up the difference with our labor, doesn't mean we can all do it at once. There's only so much room in the system, since the number of tokens (currency) in our system is finite. Someone will ALWAYS default.

In this way, the system is designed to encourage you to work a little harder to make up that extra $.06, and it shows you that it's possible - but at the same time the system is designed to ALWAYS be capturing the real goods of someone through foreclosure.

So do you want to work harder, and give them your labor, thereby settling the debt? Or do you want to have your assets siezed from you, thereby settling the debt? Either way, they're getting your labor, your goods.

[color=red]All for the privledge of using currency.


Ask your brother why he opposes currency being issued without interest attached to it. And don't hold your breath.

[Joe King]

Using your brothers example of "The numbers all cancel," What about the interest? The interest is generated on money. So $1 loan = $1.06 due. So 1.06-1.00 is .06. Where does the .06 come from? Numbers do not all cancel.

It comes via your sweat from runnin' in the "rat race".

Now get back to it. Chop! Chop!

I needs my 6 cents. ;)


;D

[Filthy Keynes]

Dont take this personal.....

If he graduated and has a PHD, especially from a upper echelon school he is a Socialist/Communist BY DESIGN.



I would start with defining those terms to him, and he will see real quick what the truth is. As a Central Bank is the 5th Plank of the Communist Manifesto, and has been used by ALL Socialist countries. Once you can get him to admit they are evil, he will be forced to face his opinions in a different light.

Graduating all students, at the same time, with the same degree, is a Communist ideology as well......It is the TRUTH.

He may not like it, but you cant help him with that.


I agree. Here is what I told him a few days ago:


Afterall Keynesianism is a religion, and it even mentions faith. “Full FAITH in the US Government”. It is “Statism” or what we would refer to as Communism/Marxism. In essence Keynesianism is a pure faith-based religion.

[TheNocturnalEgyptian]

Using your brothers example of "The numbers all cancel," What about the interest? The interest is generated on money. So $1 loan = $1.06 due. So 1.06-1.00 is .06. Where does the .06 come from? Numbers do not all cancel.

It comes via your sweat from runnin' in the "rat race".

Now get back to it. Chop! Chop!

I needs my 6 cents. ;)


;D


Totally agreed. I added to my reply.

[gunDriller]

Judge me by the coinage in my pocket as it certainley different then the masses.



http://gold-silver.us/forum/index.php?action=dlattach;topic=13819.0;attach=421 8;image

beautiful !

is that your stash ?

i'd love to see a picture like that with a few palladiums & platinums thrown in too.

[Awoke]

Awoke, regarding your analogy with the peanuts.

Let's say the guy who the bank loaned 10 peanuts to was a tailor, and the banker needed a new suit. A new suit costs 2 peanuts, so the tailor uses his time, labor, and resources to make the banker a new suit. The banker pays him 2 peanuts, giving him a total of 12 peanuts with which to repay the loan. Look at it this way, for the privilege of loaning him 10 peanuts, the bank got the 10 peanuts back plus a new suit. And the tailor had to use his time, labor, and resources to pay the interest.


Sure, there can be dynamics, but in the reality of 3rd world countries that are receiving supposed foreign aid, they don't typically have anything to offer as good or services in return (outside of black-ops terrorist mercenary services, or militant revolutionary fronts, etc.)

So what you're saying is only going to work if the Banker loaning the peanuts is directly in the market to legitimately purchase a new suit, and to purchase it with existing peanuts, not paper peanuts that he created from thin air.

I know and understand that it can happen, and that in today's global market there are multiple buyers and sellers of goods and services, but the point I'm making is that fractional reserve lending will create debt.

[Filthy Keynes]

Judge me by the coinage in my pocket as it certainley different then the masses.




beautiful !

is that your stash ?

i'd love to see a picture like that with a few palladiums & platinums thrown in too.


Like these platinum chocolates?

[Ash_Williams]

Again, I repeat - it is MATHEMATICALLY IMPOSSIBLE for there not to be someone, somewhere, who defaults and has their property seized. Just because we can make up the difference with our labor, doesn't mean we can all do it at once. There's only so much room in the system, since the number of tokens (currency) in our system is finite. Someone will ALWAYS default.

Not really. Everyone doesn't borrow and repay at the exact same time.
If things ran smooth you'd run into a problem only if time its self were finite.