Pops wrote:Then all the income I've earned over my lifetime has been borrowed?
Newfie wrote:So what changes when I buy a tangible asset? Like some land.
Then I turn the debt into something real?
vtsnowedin wrote:You make it sound like nobody has any assets that are paid for or any equity in their house or land. If that were true nobody would have a positive net worth and we are far from that.
vtsnowedin wrote:You make it sound like nobody has any assets that are paid for or any equity in their house or land. If that were true nobody would have a positive net worth and we are far from that.
MonteQuest wrote: To put it another way, if all debt was paid off, there wouldn't be any money in circulation.
Newfie wrote:So what changes when I buy a tangible asset? Like some land.
Newfie wrote:Monte,
The MONETARY value rises and falls. That's an abstraction.
The value to you and your family is something different. It can vary also, but for different reasons.
And, money or investments can go away, evaporate.
Real assets are more permanent. You can be stripped ofownership, but it's usually harder.
MonteQuest wrote:Newfie wrote:Monte,
The MONETARY value rises and falls. That's an abstraction.
The value to you and your family is something different. It can vary also, but for different reasons.
And, money or investments can go away, evaporate.
Real assets are more permanent. You can be stripped ofownership, but it's usually harder.
And this relates how--to debt based money?
MonteQuest wrote:Real assets are more permanent.
A little elaboration for clarity here, as my above claim was a bit misleading. If you tried to retire all debt, there isn't enough money in circulation or anywhere else to do so.
davep wrote:The genius of the various transition plans to an equity-based monetary system are that all debts (sovereign and private) are steadily paid back (from nothing, via the treasury or central bank) to the banks as their fractional reserve requirements are increased. This decreases debt with the endpoint being no debt-based money and a healthy base of equity. It also decreases the risk of inflation/deflation if the fractional reserve requirements are ramped up at the optimal rate with the repayment of the debt.
MonteQuest wrote:MonteQuest wrote:Real assets are more permanent.
Are they? Look at the housing crisis. Homes that were purchased or $500,000 dollars won't bring $175,000.
Homes or land are "fixed" assets, not readily made liquid like dollars in your billfold. If deflation occurs(which is too little money chasing too many houses or too much land for sale) the price drops to compete for the shrinking dollars available. Conversely, inflation(too much money chasing too few goods) drives up the price. Inflation is wrongly thought of as rising prices; that's a result of inflation of the money supply through easy credit. The FED through setting interest rates and buying/selling bonds tries to keep a Goldilocks type control of the money supply. Not too hot and not too cold.
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