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Post by turbonium on Jul 19, 2005 22:02:13 GMT -4
But, not having the bank being able to "create" money out of thin air as a book entry or written check is a key to these transactions. They cannot be allowed to have this advantage over any and all other businesses or citizens.You are switching to a different argument. The Debt Virus Hypothesis (DVH) still fails, even if banks really did have an unfair advantage. The argument was that there was no money being created to account for the interest, and that this forced other loans to be made with there interest charges and so on, causing an infinite spiral of debt buildup. Now that we know that money is being created by the banks from the interest payments, we know that the central argument of the DVH collapses. First, I said the DVH was a "good name" for what I am arguing, as I wasn't aware that an actual DVH was in existence, so please don't take it as that I meant it as an endorsement of the DVH of the book. Now, the money being created by interest is still not paper money being created, which seems to be what you are saying here. How is paper or "real" money being created by charging interest? Paying down interest is done with paper money already in the system, not from any new paper money that was created.
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Post by turbonium on Jul 19, 2005 22:15:34 GMT -4
Money is anything we accept as a medium of exchange. Businesses happily accept checks from banks and give them toasters in return. The beauty of loans and checks is that new money comes into existence just when it is needed, when the loan is made, and goes out of existence when the loan is paid off..The transaction you describe here is flawed - the "new money" is really 'phantom' money[/B] (book entry money) coming "into existence" when the loan is made. But, it is paper money or real money used to pay back the loan - and it does not go "out of existence"..
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Post by turbonium on Jul 19, 2005 22:22:39 GMT -4
It makes no sense for the bank to create the money for the interest at the same time it makes the loan. The bank, of course, is not going to give the borrower the money to pay the interest on the loan. If the borrower is a business, the business will try to use the money to expand its business and make it more productive. Its hard work and industriousness grows the economy by creating additional goods and/or services that did not exist before. THAT is the real backing of money whether you want it to be or not. That also signals the proper time for new money to be created, which happens as the bank receives its interest payments. On this one point I completely agree with you - that the businesses productivity makes the economy grow and helps make their overall communities flourish. But the bank has done nothing itself to contribute to this success that would not be better accomplished by not charging interest that is NOT new money when it is paid back. I again say that there is no new money created by charging interest - that is simply a book entry.
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Post by turbonium on Jul 19, 2005 22:32:59 GMT -4
Note - banks don't change rates for OUR benefit - only for THEIR benefit. -as you would expect from private for profit corporations.Such action is the engine of the free market--we each try to act in our best interest. The big advantage of this is that each of us are in the best position to know what we need or want at any given time and what we are willing to do or trade for it. The interplay between us leads to the creation of prices, which are numerical expressions of the value of economic goods. Numbers allow for economic calculation--you can make economic decisions by comparing numbers. Your scheme of completely centralizing the money supply and just letting the printing presses run in hopes of paying off all debt works to destroy price information and the possibility of economic calculation. You have no means to tell how much money to stuff into our pockets, and thus, no means to make money any sort of measure of value. First I have never said to just let the printing presses run. I have already said that it is important to monitor and regulate money supplies already in the system and any money to be introduced into the system. The free market is not one where the bank is needed - they produce no goods of value or for purchase. You shop for food, clothing, groceries, etc. Those still have prices for making your economic decisions! The "price information" has not been destroyed whatsoever for goods, and the interplay between buyer and seller is in a completely free market system. So, the people still know the value of a buck, so to speak. More than before, because these values are not skewed by interest charges and loan money made up out of thin air book entries.
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Post by turbonium on Jul 19, 2005 22:45:30 GMT -4
Business monopolies can't easily stay that way for long. The world is always changing, and people are always coming up with better ideas. A government-enforced monopoly, on the other hand, is much more difficult to get rid of. I don't understand how you can be against monopolies yet want to seize control of the money supply and give it completely to the government, who will have a legal monopoly over it. If you argue that powerful businessmen mismanage the money supply, then why should we think that the government, the most powerful organization of all, will manage it any better?It can't be over-emphasized that the structure of the money issuing body be made of publicly elected representatives serving limited terms (say 4-5 years), that it is transparent in its entire day-to-day business operations, including all monetary decisions and policies, and is audited every year by publicly appointed independent investigation groups. The main thing is that the people can see at all times that the monetary decisions are being done above board and for the public benefit. Question - you say here that I am advocating the Gov't hold a monopoly on the money creation - isn't that how you see it right now, that the Federal Reserve is the US Gov't agency that has monopoly power to create US money?
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Post by PeterB on Jul 20, 2005 0:18:07 GMT -4
The free market is not one where the bank is needed - they produce no goods of value or for purchase. You shop for food, clothing, groceries, etc. Those still have prices for making your economic decisions! The "price information" has not been destroyed whatsoever for goods, and the interplay between buyer and seller is in a completely free market system. So, the people still know the value of a buck, so to speak. More than before, because these values are not skewed by interest charges and loan money made up out of thin air book entries. If the banks aren't necessary in a free market system, how can a business expand? From where would it obtain the necessary credit?
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Post by turbonium on Jul 20, 2005 0:27:48 GMT -4
The free market is not one where the bank is needed - they produce no goods of value or for purchase. You shop for food, clothing, groceries, etc. Those still have prices for making your economic decisions! The "price information" has not been destroyed whatsoever for goods, and the interplay between buyer and seller is in a completely free market system. So, the people still know the value of a buck, so to speak. More than before, because these values are not skewed by interest charges and loan money made up out of thin air book entries. If the banks aren't necessary in a free market system, how can a business expand? From where would it obtain the necessary credit? They are not needed to operate as a free market business, that is, a for profit , private enterprise, as they produce no goods and the services they provide should not be for profit (earnings only to match expenses). The system for which they create currency is, however, a free market system.
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Post by PeterB on Jul 20, 2005 1:01:29 GMT -4
Sorry turbonium, can you explain your answer in a bit more detail, please.
Cheers
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Post by turbonium on Jul 20, 2005 1:53:08 GMT -4
Sorry turbonium, can you explain your answer in a bit more detail, please. Cheers Sure, peter, The banks need to be reformed out of operating as a for-profit business monopoly, The free enterprise banking systems in existense before central banks were bought out by the very wealthy bankers and then became the monopoly we have today. They seek maximum return for the shareholders (profit) before any other consideration, including the welfare of the customers (we the people). The banks have to be a non-profit Gov't entity. As much as I am for small Gov't whenever possible, the creation of money has to be done by elected and fully accountable representatives of the people. The free market economy is able to thrive within this system, as the banks primary duty is to maintain an optimal supply of money for people and businesses to create a strong, stable economy . Cheers
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Post by turbonium on Jul 20, 2005 2:42:24 GMT -4
Consider that the typical "new world order" publications do not check the validity of their sources before publishing them. The notion that Rothschild et al. are "secret" owners, in significant part, of the U.S. Federal Reserve system is an oft-repeated statement that seems to gain credibility with each new repetition. It's something that everyone seems to "know" is true, but no one can really substantiate. You claim Rothschild is an owner of the Federal Reserve. We claim they are not. Since our claim is the negative and can therefore not be proven, the burden of proof is yours. We justly assume Rothschild et al. are not owners of the Federal Reserve unless you can prove otherwise. The Fed is the epitome of secrecy - decisions are made at secret meetings, and although a brief report is released to the public six weeks later, all transcripts of the deliberations are destroyed. That policy was begun in 1970 when the Freedom-of-Information Act was passed. Not even the CIA or FBI has this kind of secrecy. But, here is the proof , from this link www.save-a-patriot.org/files/view/whofed.html is the below information, as existed in 1976 (the last available complete information with links from my findings). The information is from the 94th US Congress.. The org chart is shown on the link above... Source: Federal Reserve Directors: A Study of Corporate and Banking Influence. Staff Report,Committee on Banking,Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.
Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control.
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Post by JayUtah on Jul 20, 2005 10:57:07 GMT -4
The Fed is the epitome of secrecy - decisions are made at secret meetings, and although a brief report is released to the public six weeks later, all transcripts of the deliberations are destroyed.You just described the policy of the meetings of the board of directors of every corporation in America, both privately and publicly held. Explain how this is any more secret than any other similar organization. Not even the CIA or FBI has this kind of secrecy.Hogwash. It's standard in the business world. You may not like it, but the Fed doesn't seem to conduct business any differently than any other organization that is similarly chartered and structured. But, here is the proof , from this link www.save-a-patriot.org/files/view/whofed.html is the below informationWhy am I supposed to accept, as confirmation of oft-repeated anonymous arguments shared among right-wing conspiracy theorists, another oft-repeated argument shared among right-wing conspiracy theorists? A simple Google search reveals that these charts and their conspiratorial analysis are quoted verbatim on at least five dozen of the standard "shadow government" web sites. Am I really supposed to believe that the authors of these sites did the same research by looking up an obscure report to Congress and managed to analyze it using the exact same words? Or is it more likely they just copied and pasted the information without verifying it? What is the actual origin of this information? Source: Federal Reserve Directors: A Study of Corporate and Banking Influence. Staff Report,Committee on Banking,Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.Luckily I've been able to verify that the citation refers to an actual publication that is available at a library near me. So hopefully shortly I'll be able to do what you and John Kotmair didn't do: read the original source. Don't you find it suspicious that a quotation from a source that emitted in 1976 is able to reproduce a chart (cf. Chart 1) that refers to something that happened in 1980? It leads me to suspect this is not necessarily an accurate reproduction from the source. Apparently this does not concern any of the right-wing web sites that reproduce the chart as shown. Amazing that not one of them tried to reconcile that discrepancy. "...In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control."The problem here is that all the evidentiary value is in the analysis, not the charts. The charts likely do appear in the publication as claimed, but the analysis that purports to explain the charts' purpose and the supporting background information, is anonymous and makes the important claims. This is a standard conspiracy theorist trick: quote correctly but largely irrelevantly from some real source, then publish it with "explanatory" analysis that makes the real claims. The analysis is juxtaposed seamlessly with the quotation, conveying the illusion that the citation is the authority for both. The "patriot" movement is composed of various mixtures of anti-taxation advocates, militias, and white supremacists. They do not, in general, represent accurate or credible sources of of information on U.S. history and policy.
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Post by ktesibios on Jul 20, 2005 16:37:24 GMT -4
Jay, you've just described something I've noticed every time I've used Google to search on keywirds relating to a popular conspiracy theory- the presence of a plethora of hits from different sites which are verbatim repetitions of each other. I've seen this enough times that I coined a term for this kind of unquestioning cut 'n' paste propagation- cyber-metastasis. In any event, it ought not to be necessary to rely on thirty-year-old Congressional documents to trace the ownership of Fed member stock. Federal Reserve banks publish the names of their shareholders. The identities of stockholders in the member banks who hold enough stock to exert control or significant influence on the banks' actions can be traced by means of the legal requirement that publicly traded companies report the names and holdings of all stockholders owning 5% or more of their outstanding shares. An economist by the name of Edward Flaherty examined the ownership of the New York Fed and its member banks by these means in 1997. What he learned can be found here: www.geocities.com/CapitolHill/Senate/3616/flaherty5.htmlFor good measure, his page about Federal Reserve conspiracy theories is here: www.geocities.com/CapitolHill/Embassy/1154/flaherty.htmlIt makes interesting reading, even for a rank layman like myself. Share and Enjoy! ;D
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Post by turbonium on Jul 20, 2005 22:23:50 GMT -4
The Fed is the epitome of secrecy - decisions are made at secret meetings, and although a brief report is released to the public six weeks later, all transcripts of the deliberations are destroyed.You just described the policy of the meetings of the board of directors of every corporation in America, both privately and publicly held. Explain how this is any more secret than any other similar organization. Whoa! I don't know where you get that idea from - it's not true and it's also illegal. Corporate laws vary from state to state, but they all have laws requiring that all minutes from board & shareholder meetings be kept on file. Corporate minutes are official records of corporate matters acted upon in a corporate meeting. They are private, but are NOT supposed to be destroyed.
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Post by Joe Durnavich on Jul 20, 2005 22:48:08 GMT -4
Now, the money being created by interest is still not paper money being created, which seems to be what you are saying here. How is paper or "real" money being created by charging interest? Paying down interest is done with paper money already in the system, not from any new paper money that was created.
You keep insisting that paper currency is the only real money. Let's work through an example with currency and see what we can discover about currency and money in general. If there is a mistake in my thinking, it should be easier to spot:
Let's say a bank loaned money to a hot dog vendor so that the vendor could open up a hot dog stand in the neighborhood. The stand becomes popular and the vendor rakes in a lot of cash making and selling hot dogs. The vendor drives to the bank every night and, for the sake of our example, makes a daily loan payment including the interest, and deposits the rest. Let's say that one night he hands in a $5 bill as his daily loan and interest payment.
In the morning, one of the bank employees needs some paper clips, so he grabs a $5 bill from petty cash, which just happens to be our hot dog loan payment bill, heads to the local office supply store, and exchanges the $5 bill for paper clips. At lunch time, the store owner heads to the hot dog stand and buys lunch with the very same $5 bill. That night, the hot dog vendor pays the $5 dollar daily loan and interest fee with the same bill.
If it took a year to pay off the loan, and if the bank needed paper clips every morning, and if the office supply store owner had a taste for hot dogs every day, we can imagine this same, single $5 bill being used to not only retire the loan including interest, but to pay for a year's supply of paper clips and hot dogs.
The lesson here is that you do not always need to create new currency when a business borrows, grows, and repays the loan with interest. The real business going on here is the creation of goods and services and their exchange. Money is a just the medium of exchange. It factors out of the picture in the long run. Once it has done its thing for one transaction, it can do it again for another.
Let that sink in for a moment: The only thing really created here are the goods and services. Your demand that paper currency has to be created in proportion to the interest is not justified.
That said, it may very well be that while that $5 bill was tied up, it was not available for use elsewhere in the economy where it may have been needed. This would be the case if the economy in general grew. In that case, the economy in general develops a greater demand for money (in our example, currency, but the same concept applies to other forms of money). The second lesson is that you cannot look at just the transactions on the local level, such as only the ones in my example, and determine if more currency needs to be created. You need new currency only if there is not enough available from elsewhere in the economy.
One of the functions of the Fed is to monitor economic indicators and determine if it needs to increase or decrease the national money supply to meet the needs of the economy. It does this through trading government securities, changing the discount rate, or buying more currency from the Treasury if needed.
Interest charges and payments do lead to currency being created by Fed—if needed. This happens at the aggregate level, which is why you have a hard time seeing it when you narrow your focus to individual transactions.
Your question, “How is paper or 'real' money being created by charging interest?” is misguided. Checks are paper money just as well as dollar bills. Once either form of money factors out of the equation, what is left standing is the “real” backing behind any money: the goods and services produced and exchanged.
(And by the way, I realize my example is extremely farfetched: Anyone who works in an office knows that there is always an overabundance of paper clips in the supply cabinet and that you never need to buy any.)
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Post by turbonium on Jul 20, 2005 22:49:51 GMT -4
Not even the CIA or FBI has this kind of secrecy.Hogwash. It's standard in the business world. You may not like it, but the Fed doesn't seem to conduct business any differently than any other organization that is similarly chartered and structured. First, there IS no organization structured and chartered like the Federal Reserve, outside of the other Central Banks, who are part of the problem as much as the Fed in other countries. Now - anything "standard in the business world" is NOT how the Fed is organized or how it carries out business. They are an entity unlike any other - privately owned, yet within the Gov't fold. It has shareholders, but its shares are not publicly traded as any "standard" corporate stocks are. It is not independently audited like any "standard" business would be. That's why it needs to be dismantled - it has no transparency or public accountability. It has the illusion of such things, but scratching beneath the surface it is easy to see these are created only for public perception. For example, this excerpt from the Fed website shows the wordplay they use to twist around the fact that the Fed is actually made up of 12 privately owned regional banks.... Although they are set up like private corporations and member banks hold their stock, the Federal Reserve Banks owe their existence to an act of Congress and have a mandate to serve the public. Therefore, they are not really "private" companies, but rather are "owned" by the citizens of the United States. www.federalreserve.gov/generalinfo/faq/faqfrbanks.htm#6Talk about "hogwash"! The deception used here is amazing! That they were created through Congress and have a "mandate" to the public means they are therefore not privately owned banks is deliberately misleading. The only thing not making that claim an out and out lie is that they use parenthesis to qualify their usage of"private" and "owned" so they cannot be accused of falsehoods.
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