vtsnowedin wrote:The housing bubble was caused by the passage of the Community reinvestment act where the Dems secured the Black vote by letting them buy houses they couldn't afford. The realtors and bankers took advantage of course and actually stripped a lot of poor people of whatever savings they had.kanon wrote: I would give one warning to those who care to listen. The FED has periodically inflated and deflated the money supply according to the best advantage of the banking cartel and the oligarch class of the time. The housing bubble and 2008 crash, followed by the QE issuance of money to their cronies are the latest example. Merely by withholding loans at a critical time, the banking cartel can crash the economy with a sudden deflation. As the 0.01% acquire vast wealth and power, when will it be to their advantage to deflate the system? My last comment on this thread.
The critical feature of our theoretical model is that it exhibits the key function of banks in modern economies, which is not their largely incidental function as financial intermediaries between depositors and borrowers, but rather their central function as creators and destroyers of money.4 A realistic model needs to reflect the fact that under the present system banks do not have to wait for depositors to appear and make funds available before they can on-lend, or intermediate, those funds. Rather, they create their own funds, deposits, in the act of lending. This fact can be verified in the description of the money creation system in many central bank statements 5 , and it is obvious to anybody who has ever lent money and created the resulting book entries.6 In other words, bank liabilities are not macroeconomic savings, even though at the microeconomic level they can appear as such. Savings are a state variable, so that by relying entirely on intermediating slow-moving savings, banks would be unable to engineer the rapid lending booms and busts that are frequently observed in practice. Rather, bank liabilities are money that can be created and destroyed at a moment’s notice. The critical importance of this fact appears to have been lost in much of the modern macroeconomics literature on banking, with the exception of Werner (2005), and the partial exception of Christiano et al. (2011).
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It should be mentioned that both private and government-issued monies are fiat monies, because the acceptability of bank deposits for commercial and official transactions has had to first be decreed by law. As we will argue in section II, virtually all monies throughout history, including precious metals, have derived most or all of their value from government fiat rather than from their intrinsic value.
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[There is] plenty of evidence that these credit systems, and the much later money systems, had their origins in the needs of the state (Ridgeway (1892)), of religious/temple institutions (Einzig (1966), Laum (1924)) and of social ceremony (Quiggin (1949)), and not in the needs of private trading relationships.
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Many historians (Del Mar (1895)) have partly attributed the eventual collapse of the Roman republic to the emergence of a plutocracy that accumulated immense private wealth at the expense of the general citizenry.
kanon wrote:I also want to comment on evilgenious concept of "will to power." It could mean the intense and relentless drive of a few to dominate society through control of money, but I think this is an instinctive drive to improve social status, which is exploited in consumerism and certainly is facilitated by debt. People believe they can borrow to obtain higher social status, whether a bigger house, car, or a business venture/speculation. The constraint of lack of money is a significant frustration for the "will to power," and the boom phase of the credit cycle makes it seem that private debt-money satisfies this desire. But, of course, the bust part of the credit cycle brings it all back to reality.
onlooker wrote:I think taking a macro view, the planet as a whole has a serious problem with overextended debt loads if this is to be believed
Worldwide debt more than triple economic output as central bank shift looms
https://www.reuters.com/article/us-glob ... SKBN1CU1V9
kanon wrote:OK, one more post here. The link to the paper cited by
This.virtually all monies throughout history, including precious metals, have derived most or all of their value from government fiat rather than from their intrinsic value.
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[There is] plenty of evidence that these credit systems, and the much later money systems, had their origins in the needs of the state
And this.this is an instinctive drive to improve social status
efarmer wrote:There is zero debt right now if the folks who create, manage, and guard the illusion of fiat money
go naughty, and the chain of confidence breaks. The ability of some neato substance or intrinsic
value like "the full faith and integrity of the so and so government and people" gets compromised
then the liquidity of paper it backs up, as being just as good as some valuable substance falls on it's ass
because gravity is more reliable than money and always will be.
Zero debt is therefore equal to zero confidence. You can't eat gold, I suppose one could
eat paper money, but finding it of little nutritional value, they would crap out a fortune
on paper and still be hungry.
I would like to buy gravity futures and hedge with sunshine investments, but I can't find
any brokers with game, so I think I will make a sandwich and go back to work so I stay
ahead on paper.
kanon wrote: the FED system of debt-money does not work in a world of contracting economies and resource shortages. The FED system requires "growth" meaning increased new debt so the old debt can be paid.
evilgenius wrote:That's not correct. You talk about fiat money as if it cannot be responsive to the will of the people. You suggest that the fiat system all by itself is to blame, and not the way that it has gotten out of control under its current management. It's true that there has been an unhinging which requires a sort of whoring by the Fed and the layer of money lenders that seek to procure and sustain US dominance via economic means, but the root substance that gives them the ability to pull that off is not the issue.
The greatest problem the US faces domestically is probably the artificially low wage structure that the Fed has been able to engender under the guise of fighting inflation. * * *
Your criticism is better placed at the next layer above, and not the banks, which encourages profligate borrowing in order to fund international dominance. * * *
onlooker wrote: The problem as I see it is a basic one of hoarding. Money is an instrument by which wealth can be accumulated and hoarded. So, we must absolutely begin to get away from money as we understand it in the modern age.
onlooker wrote:So, I take it V, that you will find it acceptable as we slide down into further economic ruin and more and more people become destitute that just a few lucky ones will live in opulence. Or is it that you are just forecasting for the foreseeable future rosy skies.? Or do you think we can just continue lending and accumulating Debt forever? Tell me who is out to lunch or who may not ponder these question of the human condition as it relates to millions or billions. Oh I get it, you think President Reagan and trickly down economics will be working just fine into the future hahaha
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