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Road To Serfdom & The New Economics
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Plato



Joined: 09 Dec 2010
Posts: 360

PostPosted: Tue Jul 12, 2011 12:58 pm    Post subject: Reply with quote

There is nothing new here, as some of the quotes below testify;

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
Lord Acton (1834-1902)

"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Thomas Jefferson

"I believe that banking institutions are more dangerous to our liberties than standing armies."

Thomas Jefferson

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. “
Henry Ford

"Give me control of a nation's currency and I care not who makes it’s laws."
A.M. Rothschild

“The Congress shall have the power to coin money, and regulate the value thereof ..””
US Constitution, article 1, section 8


I hate to repeat myself but the solution is really not as hard as some people want to make us believe;

How to fix all this?
1] Money as a means of exchange, a supposed store of value and unit of account is too pivotal for any economy to be handled by private institutions; banks and any money creating institution should be firmly placed in the hands of the people, like it says in the US constitution;
"Congress shall have the power to coin money and regulate the value thereof." Therefore no more private banks, no more government debts, as the gov't, as the sovereign entity it is, issues it's own money;
2] Abolition of usury (or interest, as it is euphemistically called) for private individuals; the payment of usury used to be considered a sin for good reason
3] Massive debt relief worldwide; the whole system has to be rebooted by giving people a fair financial chance again; this means that ultimately some very rich people will pay the price ( I, for one, surely don’t feel sorry for them, they are the same ones that own our banks).

If we implement these changes, and kick out the current politicians, which only represent special (moneyed) interests, and choose people that will actually represent the people, we might be heading in the right direction.
In the meantime, buy physical silver and gold, because it does not look like these fiat currencies will last. But I can’t eat gold? You can’t eat paper either, especially the digital kind. The advantage of gold is that there is no “IOU” written on it. It has been around since the dawn of history, and will be for a long time to come...

"Paper money eventually returns to its intrinsic value -- zero." - Voltaire
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urbanspaceman



Joined: 02 Sep 2006
Posts: 325
Location: London , UK

PostPosted: Tue Jul 12, 2011 1:38 pm    Post subject: Reply with quote

Plato wrote:
How to fix all this?

I'm no expert in economics, but I've rubbed shoulders with people in the monetary reform movement in the UK and I've learned a fair bit about monetary reform. Most of your points are bang on, a few I have to disagree with…you are throwing out the baby with the bathwater on 2 points:

Plato wrote:
…no more private banks

The power to issue money and banking are 2 different things. The problem we have is that they merged together in an unholy alliance. So there's no need to get rid of private banks…in fact, they can be very socially useful if they stick to saving your money and giving out loans. Banking should be left to the private sector, and issuing of currency must be carefully controlled by the people it's meant to serve.

Plato wrote:
Abolition of usury (or interest, as it is euphemistically called) for private individuals

Somehow usury and interest became synonyms at some point, and this has confused this issue (possibly on purpose to make usury socially acceptable). Interest is okay, usury is not. Making a loan is a shared risk between 2 parties, and if there is profit it's right that the profit should be shared through interest payments. But if a loan is given knowing there is never any chance of profit (ie. of something extra being produced from the loan, some real wealth), it is wrong to ask for interest payments. That's usury -- expecting interest on a non-productive loan.

The clearest thinker that I know of on this topic was poet Hilaire Belloc:
http://www.catholictradition.org/Classics/belloc2-2.htm

Quote:
…today Usury works side by side with legitimate profit, and, confused with it, has become universal throughout what used to be Christian civilization. It is taken for granted that every loan shall bear interest, without inquiring whether it be productive or unproductive. The whole financial side of our civilization is still based on that false conception.
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Plato



Joined: 09 Dec 2010
Posts: 360

PostPosted: Wed Jul 13, 2011 2:05 pm    Post subject: On privately owned banks Reply with quote

Hi urbanspaceman,
Apperently you still have confidence in privately run banks, the very institutions that have almost brought our entire financial system to its knees; even Henry Paulson (former treasury secretary in 2008 and former CEO of Goldman Sachs) admitted that the entire financial system almost collapsed completely on 3 occasions in 2008, all due to the actions of private banks. But let’s start with some “fun” facts;

1]The Federal Reserve bank of New York, as the other 11 Federal Reserve banks of the Federal Reserve system are privately owned. In 1913 the Federal reserve Act was passed which supposedly allowed this, despite the fact that this flies in the of the US constitution (see below) .This means that the Fed is controlled by private individuals, under the guise of “let’s not get the politicians involved in our monetary system, because they will fuck it up, let’s hire some “independent” outsiders that know what they are doing. You can find the names of these families in the link (the usual suspects like the Rothschild, Morgan, Rockefeller families etc.).
http://www.globalresearch.ca/index.php?context=va&aid=25080

2] As a proxy for inflation during this 98 year time period, consider the fact that gold was worth USD 20 in 1913, today it’s new record is at USD 1587! This means that you have to bring 80 times the amount of dollars today to buy one ounce of gold as you needed back in 1913. Why is this a relevant measure; the amount of gold is relatively fixed because you simply cannot print it. Jim Rogers calls this the debasement of the dollar and this will accelerate as QE3 has been announced (as was entirely predictable).

Money is, by its nature not suitable to be issued by private banks. Its the lifeblood of an economy; to function properly and efficiently, money is needed as a means of exchange and a unit of measure; without we would be reduced to trucking and bartering, and our living standard would drop dramatically. Consider that you would have to trade your home grown tomatoes for a lap top, even with today’s technology, this would be a time consuming and complicated process. Therefore, and whether you like it or not, money is needed to operate an economy . But then arises the question, who is to issue money and why? The founding fathers found the answer to this so important that they wrote it down in the US constitution; "Congress shall have the power to coin money and regulate the value thereof." (US Constitution, article 1, section 8) These were wise men, JFK said of Thomas Jefferson during an address at a White House dinner honoring Nobel Prize winners (29 April 1962);
“I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered together at the White House, with the possible exception of when Thomas Jefferson dined alone.” So this is really not my idea. They already realised more than two centuries ago, that this was pivotal in order to have a fair and balanced economic system.

Large corporations like steel companies actually produce something of value, they turn iron ore into steel , car companies use steel and other components to produce cars etc. Even Microsoft, despite its dismal software, actually produces something that we can use. What do bankers do? They create money out of thin air (or rather credit); a privilege which has been granted to them. And as an added bonus they get to charge interest over the money they have “created”. Ah, I can hear you say it now, “But they allocate credit to where it will be most productive. That’s the reason for their existence. A government owned entity will never be able to do it better.” Really? Then please explain the housing bubble in countries like the US, Spain, Ireland, Iceland, Australia etc. Please explain how entire countries are going down the tubes because of reckless lending by foreign banks, the case in point being Greece which received tens of billions from banks in Germany and France. Has credit been allocated optimally? As a result Greece has until now not been allowed to go bust because then these banks are in real trouble. Once again the entire financial system is about to go off the cliff, all because of greedy, stupid bankers. Or could there be another reason behind all of this? In my opinion this is an engineered financial crisis, so when the problem gets supposedly to big to handle to shove a world government and world currency down our throats. It works every time, first you create a “problem”, then you offer a “solution”. Read this excellent article by an independent journalist in the Canadian press;

http://canadafreepress.com/index.php/article/9454

This is getting long, in another post I would like to explain why charging interest is not a good idea (unless you’re a banker of course).
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Peter



Joined: 26 Jun 2007
Posts: 2416
Location: The Canadian shield

PostPosted: Wed Jul 13, 2011 4:56 pm    Post subject: you can bank on it Reply with quote

As a Canadian, I can say that our banks are less corrupted than most, more regulated than many and less exposed than some. Those that suffered some at the end of 2008 were only the ones that had purchased US-based divisions that were "allowed" to conduct their business as usual.

We have a tradition of watching bankers closely but also of being very trusting. The more this situation plays out, the clearer our objectives will become. Stop speculation, reduce banks to depositories of credit and facilitators of exchange as well as ensuring that the money supply is controlled by the people's needs and not the financier's whims.

Financial apocalypse just means the revelation of end times. The vision of what was and what must be as well as being about time that we reach the end of usury and debt-based servitude. Here comes reality, are we going to be ready for it?

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Plato



Joined: 09 Dec 2010
Posts: 360

PostPosted: Thu Jul 14, 2011 1:37 am    Post subject: Thank god for Canada! Reply with quote

Peter,
Thank god for Canada, one of the most sanely and humanely run countries in the world; if only all countries were more like Canada! Alas, this is not the case and the US seems the be the opposite of Canada; dragging the rest of the western world down with it. Thank god for the Royal Canadian mint, which produces some very fine silver and gold coins! Accumulate some of those, as we are indeed heading for very decisive times, although you apparently seem to think it is not currency. In several US states gold and siver has been reintroduced recently as legal tender( formally in Utah, thinking about it in Minnesota). Too bad Elizaberh is still the official head of state though, why on earth do you put up with her?!
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Peter



Joined: 26 Jun 2007
Posts: 2416
Location: The Canadian shield

PostPosted: Thu Jul 14, 2011 9:44 am    Post subject: cashing in on cash Reply with quote

We have a fairly deeply submerged Jekyll and Hyde personality, partly due to our Satan/Savior to the south... Embarassed

When my forebears left Pennsylvania in 1779 it was not so much for loyalty to the crown (a cross that we still bear today, symbolically, in the Governor General, representative of the British royalty in our parliament Evil or Very Mad ) as much as it was fear of reprisal and confiscation of the land that they had stolen (errr received by treaty) from the indigenous peoples while British colonists. They came to Canada with the promise of more stolen (errr received by treaty) land and protection from invasion/reprisal. (The war of 1812 was a bit of that, with the Americans burning our parliament buildings and we returned the favor...lol)

Spooning with the beast has given us succor, protection, indifference but mostly economic stability. Our timidity may be a result of never really fighting our own battles (or having none to fight) but our efforts as negociators and peace-keepers (until Harper upped the ante by increasing arms production and getting into Afghanistan in a belligerent way Sad ) were truly something to be proud of.

Gold and silver should always be available as a means of exchange, at whatever the going rate ends up, but the people's needs should be the only dictator of monetary policy. Acton was right about power and the power of money comes from the love that some have for acquiring, holding and spending it.

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urbanspaceman



Joined: 02 Sep 2006
Posts: 325
Location: London , UK

PostPosted: Thu Jul 14, 2011 10:22 am    Post subject: Reply with quote

Plato wrote:
Apperently you still have confidence in privately run banks

As I said, baby and bathwater. Is amputation always the best way to cure the disease? No.

You're exactly right that money is the lifeblood of the economy and society would be very limited without it. There are many who think the world would be better without money because money causes problems…but that's a very shallow view, and getting rid of private banks altogether is equally shallow.

I don't trust private banks as they are now, but I also don't trust government to do banking very well. Things are so so fucked up right now it's tempting to trash everything and start over.

But we need to separate the powers again to bring things back into balance. Private banks competing for customers and issuing loans serves a very positive social function…sometimes small businesses would never begin without a loan. But when private banks can issue loans based on nothing, that's when they are socially destructive…they should not have that privilege. No self-interested person or group should be allowed to issue money, it's too prone to abuse…it must be a power shared by all.

Plato wrote:
...charging interest is not a good idea

As long as charging interest follows strict rules, it can be a very good thing. Interest should not be guaranteed, but based on actual wealth created from the loan. The lender should equally share the risk, using real money that was earned by the lender. If profits can be shared, the lender is encouraged to loan.
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Plato



Joined: 09 Dec 2010
Posts: 360

PostPosted: Fri Jul 15, 2011 4:05 am    Post subject: On the charging of interest Reply with quote

Hi Peter,
Thanks for the historical info, I didn’t know that, I sure hope to visit your beautiful country one day!

Hi urbanspaceman,
Mmm, shallow eh? Well, me, may be yes, but Thomas Jefferson shallow? Wow, that’s kind of a rich statement! Boy, kinda sounds like a banker that’s about to loose his bonus Wink.

But then you go on to say that;
“But when private banks can issue loans based on nothing, that's when they are socially destructive…they should not have that privilege. No self-interested person or group should be allowed to issue money, it's too prone to abuse…it must be a power shared by all.”

The abuse is exactly what has been going on and is still going on more than ever before (eg the JP Morgue came in with some very “good” results today; that means once again fucking over the sheeple)). Basically you seem to agree with me because a power shared by all means the people (which in the US is represented by Congress), not a few extremely wealthy private individuals, as it is today . Yet you still seem to entertain the romantic notion that there actually is some “noble” banks out there that are serving the people with some very benevolent credit, well my question to you, which banks ? If there is any I’m sure they’ll be able to operate just as well with the government as its only shareholder instead of private individuals. I completely agree with you that the politicians that run governments today are completely untrustworthy; they will have to be replaced by individuals that actuall serve the people, instead of the elite. Politicians today are simply the agents of the bankers.

Now I would like to address the second issue at hand; the charging of interest; since the late Sheldon Emry wrote an excellent piece about it I’ll be using this here; an excerpt from his article concerning the charging of interest (this was written in the 80’s (man, what a foresight); bear in mind that interest rates were much higher in those years).

Excerpt from; Billions for Bankers--Debts for the People
by Sheldon Emry full article; http://thelibertyclub.net/emry.pdf

The interest amount is never created
The only way new money (which is not true money, but rather credit representing a debt), goes into circulation in America is when it is borrowed from the bankers. When the State and people borrow large sums, we seem to prosper. However, the bankers "create" only the amount of the principal of each loan, never the extra amount needed to pay the interest. Therefore, the new money never equals the new debt added. The amounts needed to pay the interest on loans is not "created," and therefore does not exist!

Under this system, where new debt always exceeds new money no matter how much or how little is borrowed, the total debt increasingly outstrips the amount of money available to pay the debt. The people can never, ever get out of debt!
The following example will show the viciousness of this interest-debt system via its "built in" shortage of money.

The Tyranny of Compound Interest
When a citizen goes to a banker to borrow $60,000 to purchase a home or a farm, the bank clerk has the borrower agree to pay back the loan plus interest. At 14% interest for 30 years, the borrower must agree to pay $710.92 per month for a total of $255,931.20.
The clerk then requires the citizen to assign to the banker the right of ownership of the property if the borrower does not make the required payments. The bank clerk then gives the borrower a $60,000 check or a $60,000 deposit slip, crediting the borrower's checking account with $60,000.

The borrower then writes checks to the builder, subcontractors, etc. who in turn write checks. $60,000 of new "checkbook" money is thereby added to the "money in circulation."
However, this is the fatal flaw in the system: the only new money created and put into circulation is the amount of the loan, $60,000. The money to pay the interest is NOT created, and therefore was NOT added to "money in circulation."

Even so, this borrower (and those who follow him in ownership of the property) must earn and take out of circulation $255,931, almost $200,000 more than he put in circulation when he borrowed the original $60,000! (This interest cheats all families out of nicer homes. It is not that they cannot afford them; it is because the bankers' interest forces them to pay for 4 homes to get one!)

Every new loan puts the same process in operation. Each borrower adds a small sum to the total money supply when he borrows, but the payments on the loan (because of interest) then deduct a much larger sum from the total money supply.

There is therefore no way all debtors can pay off the money lenders. As they pay the principle and interest, the money in circulation disappears. All they can do is struggle against each other, borrowing more and more from the money lenders each generation. The money lenders (bankers), who produce nothing of value, gradually gain a death grip on the land, buildings, and present and future earnings of the whole working population. Proverbs 22:7 has come to pass in America. "The rich ruleth over the poor, and the borrower is servant to the lender."

Small loans do the same thing
If you have not quite grasped the impact of the above, let us consider a small auto loan for 3 years at 18% interest. Step 1: Citizen borrows $5,000 and pays it into circulation (it goes to the dealer, factory, miner, etc.) and signs a note agreeing to pay the Bankers $6,500. Step 2: Citizen pays $180 per month of his earnings to the Banker. In three years, he will remove from circulation $1,500 more than he put in circulation.
Every loan of banker "created" money (credit) causes the same thing to happen. Since this has happened millions of times since 1913 (and continues today), you can see why America has gone from a prosperous, debt-free nation to a debt-ridden nation where practically every home, farm and business is paying usury-tribute to the bankers.

Checking Up On Cash
In the millions of transactions made each year like those just discussed, little actual currency changes hands, nor is it necessary that it do so.
About 95 percent of all "cash" transactions in the U. S. are executed by check. Consider also that banks must only hold 10 percent of their deposits on site in cash at any given time. This means 90 percent of all deposits, though they may actually be held by the ban, are not present in the form of actual cash currency.
That leaves the banker relatively safe to "create" that so-called "loan" by writing the check or deposit slip not against actual money, but against your promise to pay it back! The cost to him is paper, ink and a few dollars of overhead for each transaction. It is "check kiting" on an enormous scale. The profits increase rapidly, year after year.
End of excerpt

I hope this sort of clarifies the reasons why I and a lot of other people think that charging interest is not a good idea, at least not to private individuals that eg want to buy a house. Since the financial system is much more complex these days, I think that large multi-national compnies should definitely NOT be able to borrow money for free from the public. Small start-ups with lots of potential for improving the lives of ALL people should of course be granted loans on no or very little interest.
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Yurik



Joined: 21 Jan 2009
Posts: 78

PostPosted: Fri Jul 15, 2011 9:42 pm    Post subject: Reply with quote

Guns and Butter, for July 13, 2011 - 1:00pm

Quote:
"Guns, Finance and Butter - Finance Is the New Mode of Warfare" with Dr. Michael Hudson. The jobless recovery; the debt ceiling and default; China; Greece; banks, not countries, receive the bailouts; financial warfare; IMF and EU; European Central Bank; US credit default swaps; US agricultural exports create food dependency; currency devaluation devalues the price of labor; class war of banks against the rest of society.


d/l: http://archives.kpfa.org/data/20110713-Wed1300.mp3
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urbanspaceman



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Location: London , UK

PostPosted: Sat Jul 16, 2011 9:51 am    Post subject: Reply with quote

Plato wrote:
Basically you seem to agree with me…Yet you still seem to entertain the romantic notion that there actually is some “noble” banks out there

You don't understand where I'm coming from because we disagree where the source of the problem is.

Thanks to Thomas Sheridan, I can now identify and articulate the source of the problem: psychopathic people taking over all our institutions.

You have identified banks as the problem. You think that banks themselves are psychopathic. But institutions can't be psychopathic, only the people in them can be. Things or institutions can't be "evil", as "evil" only applies to people.

You have anthropomorphised something which is just a useful tool being used by evil people, and your solution is to get rid of the tool because you think that tool is evil. It's like hitting your hand accidentally with a hammer, calling that hammer evil, and then banning hammers. I call that shallow and short-sighted, because now you are preventing everyone from using hammers for good, using them for building their houses, for example.

This is where "let's get rid of evil things" line of thinking takes us: our medical system is failing us, because many medicines are turning out of be poisons, so should we get rid of modern medicine and hospitals? Our food supply is being poisoned, so should we get rid of supermarkets? EM radiation is probably making us ill, so should we ban all wireless technology? Government is corrupt, so let's switch to anarchy? Ban Western civilisation, live in caves, then maybe finally we'll get rid of the evil! It's curing a wart on your toe by cutting off your leg, I say.

You are with me when it comes to government and money. I've seen many others use the "let's get rid of evil things" stance: government = bad, money = bad, no government and no money = good! But you can see that money is useful and saves you from exchanging 1000 tomatoes for a computer. And you can see that government is sometimes good -- because someone has to watch those damn bankers!

My argument is to weed out psychopaths and psychopathic values from institutions, and that is the main thing that will make them useful tools for good people again. Moving banking into government is moving the deck chairs on the Titanic. It doesn't address the core problem.

On interest: Again, you're identifying the wrong source of the problem. Interest is not the problem, it's how the currency is issued these days. The currency is counterfeit, because under the current system banks loan money they don't have. When you pay the money back, money you've earned through your own labour, you've now laundered the money for the bank. Charging interest on top of a counterfeit-money-laundering scheme makes the problem worse, but charging interest is mostly beside the issue! It's an insult to injury, for sure, but not the injury.

In other words, charging interest on counterfeit money is wrong because the money is fake, not because charging interest is itself wrong.

An interest parable: I have a plot of land, but no farm machinery. I ask to borrow the farm machinery from my neighbour. He says yes, but is worried about the risk of not being able to use it for his own crop, so he makes a deal. You can borrow it, as long as you eventually replace what the machine would have produced on his own land, plus extra. It turns out that the crop was plentiful that year, so you are able pay him back with interest. Everybody wins, the interest payment was fair and encouraged the neighbour lend his machine.

If you ban interest, you'd be stuck with a useless plot of land. With interest, 2 people profit and flourish.

Usury should not be confused with interest. Usury is immoral because it is asking to "get blood from a stone", to get more out of something unproductive. Interest is moral because asks for extra out of something productive, encouraging a lender to take a risk.
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Plato



Joined: 09 Dec 2010
Posts: 360

PostPosted: Sat Jul 16, 2011 1:34 pm    Post subject: On privately owned banks & on interest part 2 Reply with quote

Let’s go over this again; I’m getting the impression that I’m not getting my point across here, which is too bad, because it’s important. Not because I’m so smart or trying to win the upper hand here; much smarter people have thought about this predicament and come to the conclusions I wrote about. It’s important to understand how they do it; how they manage to rule us without most people even being aware of this.

I’m talking about just 2 things here; banks and who should own them and why the charging of interest is not a good idea. I’m not talking about medicine, supermarkets, food etc; that’s a whole new topic and completely besides the point. I’m not even talking about getting rid of banks, money etc. I’m just talking about who should own these banks and whether the charging of interest is a good thing.

Banks; who owns them and why?
Banks are for the most part privately owned, especially in the US (except for the black holes Fannie and Freddie, which are left to bleed to death, at the expense of the US tax payer , which will cost them hundreds of billions of dollars). Even the Federal Reserve Bank is a private corporation; owned by the Rothschilds, Morgans, Warburgs etc. Ben Bernanke does not lift a finger without getting a say so from these people. His appearances before Congress make him seem to be accountable to the US population, but that’s all a scam. Most members of Congress are in bed with the families that own the Fed. Not directly, but indirectly through all the donations they are getting from various sources, that are linked to these families. Congress reminds me of Wrestlemania, you know with these big guys pretending to be hitting the crap out of one another. It’s a scam, it’s bull shit, especially now that they are debating the debt ceiling again. They will raise the ceiling, don’t worry, because that’s what they are supposed to do; they are supposed to get the US deeper and deeper into debt, that’s what they are paid for! Because a population in debt is a population you control, it’s that simple. That’s what this is all about; control and power. You argue that psychopaths are running the banks, and that is where the real problem is; not who owns the banks. Well, in my opinion, it’s exactly the other way around, it’s psychopaths that OWN the banks, and that’s were the real problem is (and yes, they are EVIL). We live in a economic system called capitalism for a good reason, it’s not called CEO-ism or CFO-ism. Whoever puts up the capital, owns the business, and is the one that is in charge. May be it does not work like that for all companies, like a listed cookie company, but it does work like that for companies that matter to their power. Why do you think the Fed is not a listed company on the NYSE? May be it is true that there are also people working within these banks that are psychopaths, no doubt about it. But they are psychopaths which have been hired by the psychopaths that OWN the banks. Therefore, once again, something as important as money should be controlled by the people, not by the EVIL psychopaths (to use your term) that OWN the banks at this time. You said so yourself that money issued by the banks is fake, that I certainly agree with, because it has been issued by private banks, so once again we agree on something. Only if money is issued by the sovereign, which is the PEOPLE, is it real. It’s absurd that governments representing the people should go to privately owned banks and beg them for money. Therefore banks should be owned by the people/government (truly representing the people).

Interest; money that has not been brought into circulation
The problem with the interest charged on a loan is that is has never been brought into circulation. So however high or low the % is that you charge on a loan, there is no way you can repay both the principal and the interest charged. Maybe an individual can do this, but only at the expense of other individuals. There is no way that the people collectively can pay off all of their loans and the interest charged on these, the loans and interest charged will ALWAYS EXCEED the amount of money available to pay them off. That’s why the western world has been getting more and more into debt, without ever being able to escape it; it’s exactly how this is supposed to work; I thought that my last post gave some clear examples on how this works in practice. This has nothing to do with a risk reward scheme; people should be able to get a reasonable loan without having to pay interest on it.

With regard to your parable; why not propose to the guy that owns the farming machinery to share in the yield of your land if you are allowed to borrow it, what does this have to do with interest? The interest I’m talking about here is directly related to a loan in the form of MONEY, issued by a bank, for which more money (the principal and interest) will have to be repaid.

Some last points to consider; why were Islamic banks not at all hit by the 2008 financial crisis; they are simply not allowed to charge interest and therefore to invest in any of the crap that was being sold by US investment banks. Do you know the real reasons why both Lincoln and JFK were assassinated? They wanted to do away with central banks (in the case of JFK the Fed), and they wanted to print US dollar bills, not Federal Reserve bills. That way they would have eliminated the power of these families, something they could not allow. Unfortunately, these brave men came across enemies that would do anything to preserve their power. I simply hope that we will be able to identify the true enemy, instead of us bickering amongst ourselves (they sure love us to!).
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Fintan
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Joined: 18 Jan 2006
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PostPosted: Sat Jul 16, 2011 6:35 pm    Post subject: Reply with quote

When it comes to banks charging interest to governments
for loans I'm in agreement that this is an abomination.

Governments can and should print money with no interest.
The amount of money printed can be pegged to population
numbers --adjusting for the age profile of that population.

But there's a fallacy when you apply this to private banking:

Quote:
Plato:
The only way new money (which is not true money, but rather credit
representing a debt), goes into circulation in America is when it is
borrowed from the bankers.....However, the bankers "create" only the
amount of the principal of each loan, never the extra amount needed to
pay the interest. Therefore, the new money never equals the new debt
added. The amounts needed to pay the interest on loans is not "created,"
and therefore does not exist!

This is a common argument. If there is only $100 in circulation and annual
interest of 5% --then there is no way that $105 dollars can exist by year
end.

The argument ignores inflation. The money supply is always inflating in
western capitalism. The purchasing power of the $105 is equal or less
than the $100 at the start of any year.

As long as inflation and interest are both moderate then this serves to
oil the wheels of commerce and investment to the benefit of all.

Interest is a measure of the necessary reward for the investor for taking
the risk of investing. Without interest reward - then why bother lend?

Another argument containing fallacy is the line that there is something
inherently wrong with fractional reserve banking --where a bank can
lend 10 times the capital on hand. But there is nothing wrong with this
if the the loan default rate is, say, half the capital on hand. Imprudent
lending is the demon here - not fractional reserve banking.

Finally, there is the argument that the shadow banking system is also
intrinsically flawed --with its highly leveraged private capital and a host
of derivatives and options contracts hedging this capital.

Again shadow banking and esoteric financial instruments have allowed
the huge expansion in investment and trade over the last 30 years.
Without the reform of finance - the internet and telecommunications
would be far behind the current level of development.

In conclusion, there is much that is wrong with the way banking and
capital operate to the detriment of the average person. But many of
the alleged failings of finance are actually failures to apply due process
of law and prosecution or failures of prudent lending and regulation.

The bathwater is dirty - let's keep the baby.

Quote:
urbanspaceman:
My argument is to weed out psychopaths and psychopathic values from
institutions, and that is the main thing that will make them useful tools for
good people again. Moving banking into government is moving the deck
chairs on the Titanic. It doesn't address the core problem.

Agreed. And we have a good mechanism for dealing with psychopathic
behavior: it's called law. Without law being evenly applied then the
whole system is a ripoff - no matter who is running it.

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