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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: SirTripAlot]
    #25645680 -

Quote:
Fractional Reserve Banking is ingenious, but it does have its flaws, like anything. Notably, if depositors make a run


Yes, that's a flaw, but it's pretty minor compared to having the money supply controlled and owned by non-democraticly accountable private tyrannies, while plunging mankind into non-repayable debt.


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Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like it's from Neptune.  -Noam Chomsky

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers]
    #25645744 -

VroomerMcZoomers said:
Quote:
Let's start with a system that has $60,000 of real cash - $10,000 in a bank and $50,000 with the general public. 


Maybe under that system, you are right.  That system doesn't have 90% of the money supply issued as interest bearing debt.  The system we use in reality does.


The system I described IS the current system.  Any time a loan is paid back, any money loaned into existence for that loan disappears.  It doesn't matter if it's $5.00, $5 million, or whatever amount.

VroomerMcZoomers said:
...it's pretty minor compared to having the money supply controlled and owned by non-democraticly accountable private tyrannies, while plunging mankind into non-repayable debt.


First of all the Fed isn't private.  And more importantly, the debt CAN be repaid.  And that is VERY easy to prove.

If the Government simply cut expenses and raised taxes by a nominal amount, it would collect more than it spent, and the debt would go down.  TA DA!  That's it, it really is that simple.

As for personal debt, most people can pay that off too.  People often borrow many times their annual salary to buy a house.  That loan is money created out of thin air, which is usually many times more than an individual possesses or earns in an entire year.  Yet people still pay their home loans off.

I'd really love to hear your rationale why you like to make believe debt is non-repayable...  :popcorn:


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25645749 -

The simple fact that total debt is many times more than the entire supply of money.

And because most new money that enters the systems comes with an interest demand that more than was created be repaid.

The system you described begins with a giant amount of debt free money into which is injected a proportionally tiny amount of debt-money.

The system that exists begins with a small amount of debt-free money into which is injected a proportionately enormous amount of debt-money.


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Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like it's from Neptune.  -Noam Chomsky

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 1
    #25645789 -

VroomerMcZoomers said:
The simple fact that total debt is many times more than the entire supply of money.

And because most new money that enters the systems comes with an interest demand that more than was created be repaid.


So what?  Money goes back into the system when lenders buy things from people who borrowed money, and borrowers then use that same money to pay down thier debt, which lenders then put back in the system to buy more things.  Lather, rinse, repeat until the debt is gone.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03] * 1
    #25645819 -

I think the issue is the temptation on the part of the politicians to deficit spend, thereby doing an end run around your nominal tax increase.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25645821 -

So what?

The situation is that there is not enough money in existence to pay it back to the institutions that created it and 'lent' it out.

You'd need to create more money to match the amount of debt , but the very act of money creation itself makes more debt than it does money, because more than was created is required to be paid back thanks to interest.

Money can go through as many hands as it likes but the total gross  amount of it cannot be increased without creating a debt that is larger than the amount created...unless we get into debt-free money creation.


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Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like it's from Neptune.  -Noam Chomsky

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 1
    #25645851 -

VroomerMcZoomers said:
The situation is that there is not enough money in existence to pay it back to the institutions that created it and 'lent' it out.

You'd need to create more money to match the amount of debt , but the very act of money creation itself makes more debt than it does money, because more than was created is required to be paid back thanks to interest.

Money can go through as many hands as it likes but the total gross  amount of it cannot be increased without creating a debt that is larger than the amount created...unless we get into debt-free money creation.


Banks will buy products from the people they loaned money to, the people will use that money to repay the banks, who will buy more products from the people they lent money to, who can use that money to keep paying down their loan.  There doesn't have to be enough money to cover the loan.  The same money can be reused.

Does that make sense?


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: ballsalsa] * 1
    #25645853 -

ballsalsa said:
I think the issue is the temptation on the part of the politicians to deficit spend, thereby doing an end run around your nominal tax increase.


That's what's happening today by choice.  I'm saying it doesn't have to be that way.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03] * 1
    #25645900 -

Quote:
Banks will buy products from the people they loaned money to, the people will use that money to repay the banks, who will buy more products from the people they lent money to, who can use that money to keep paying down their loan.  There doesn't have to be enough money to cover the loan.  The same money can be reused.



There may be some theoretical scenario in which that happens.  Plainly, that is not what is actually happening.

And even if it was, it would not be an acceptable monetary system, the banks would be in an outrageously advantageous situation like an aristocracy or something, like they are now I guess.


--------------------
 

Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like it's from Neptune.  -Noam Chomsky

Edited by VroomerMcZoomers (11/29/18 12:10 AM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 1
    #25645913 -

VroomerMcZoomers said:
There may be some theoretical scenario in which that happens.  Plainly, that is not what is actually happening.


It is what's happening, except my example was GREATLY simplified to illustrate the point.

VroomerMcZoomers said:
And even if it was, it would not be an acceptable monetary system, the banks would be in an outrageously advantageous situation like an aristocracy or something...


Why?  It just means if I want to borrow $1,000 at 10% interest, I'll have to pay the banks back $1,100.  I know this ahead of time and I can pre-determine whether or not it's worth it to me.

As I said in another thread, I'm all in favor of Government run banks, as they'd likely have lower interest rates.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25645921 -

It is what's happening?  How so?  Debt keep going up and the ratio of debt to money keeps going up, the money supply keeps expanding too only slower than debt does.

Why?  Do you have any idea how much a cut of ALL the action in the United States is worth?  Talk about overpaying your accountant.


--------------------
 

Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like it's from Neptune.  -Noam Chomsky

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 1
    #25645930 -

VroomerMcZoomers said:
It is what's happening?  How so?


Simply because we know that banks don't require loans to be paid with unique money.  It can be recycled money - no one keeps track and no one cares.

VroomerMcZoomers said:
Debt keep going up and the ratio of debt to money keeps going up, the money supply keeps expanding too only slower than debt does.

Why?


Because our Government chooses to keep spending more than it raises.

VroomerMcZoomers said:
Do you have any idea how much a cut of ALL the action in the United States is worth?  Talk about overpaying your accountant.


I agree, and I'm very much against tax cuts for the rich and overspending for the military.  I'd like to see a balanced budget or even a positive budget.  It just takes the right elected officials to get there.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: shivas.wisdom]
    #25645955 -

shivas.wisdom said:
So without continual credit growth, decline in money supply will eventually result in economic system collapse?


So (and I'm not disagreeing), it's a ponzi scheme.


--------------------
"The Rolling Stones will break up over Brian Jones' dead body"    John Lennon

I don't want no commies in my car. No Christians either.

Simulacrum
The truth which conceals that there is none

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers]
    #25645983 -

VroomerMcZoomers said:
Quote:
Fractional Reserve Banking is ingenious, but it does have its flaws, like anything. Notably, if depositors make a run


Yes, that's a flaw, but it's pretty minor compared to having the money supply controlled and owned by non-democraticly accountable private tyrannies, while plunging mankind into non-repayable debt.


Convince/organize people to remove deposits from banks and the bank is up shit creek.

People have a choice to  hold their money...... in a bank at all.

What's undemocratic about that?

Edited by SirTripAlot (11/29/18 08:16 AM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25646193 -

Falcon91Wolvrn03 said:
VroomerMcZoomers said:
The situation is that there is not enough money in existence to pay it back to the institutions that created it and 'lent' it out.

You'd need to create more money to match the amount of debt , but the very act of money creation itself makes more debt than it does money, because more than was created is required to be paid back thanks to interest.

Money can go through as many hands as it likes but the total gross  amount of it cannot be increased without creating a debt that is larger than the amount created...unless we get into debt-free money creation.


Banks will buy products from the people they loaned money to, the people will use that money to repay the banks, who will buy more products from the people they lent money to, who can use that money to keep paying down their loan.  There doesn't have to be enough money to cover the loan.  The same money can be reused.

Does that make sense?


That's exactly the problem though. In such a system the money always gets funneled upward, the banks are essentially the source and destination of wealth, they have too much power and there is no way in which they can go broke, they have no risk, where as everyone else has to not only work for their wealth but rely on others to want/purchase it. Whether you want the banks product or not to function in this society it is forced upon you.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: koods]
    #25646202 -

koods said:
The fact that we have a debt has nothing to do with fractional reserve banking. There are countries that don’t even require a reserve ( fractional reserve means the bank is limited to how much it can loan - it is actually a conservative policy compared to not requiring fractional reserves). There are plenty of countries that have the same system that run a surplus. The reason we have a debt is because the govt spends more than we take in. The fact that we issue more debt to cover our debt is an abuse of the system, it’s not a fundamental property of it.

It’s like blaming your bank when you have an overdraft for letting you spend more than you have.


You're not wrong, but to say it's an abuse/not a fundamental property is subjective. "Is it a feature or a bug?" Well to the people profitting off of it (the bankers) it's a feature, the the ones getting taken advantage of by it (the populace) it's a bug. At the end of the day does it really matter if it's intentional or not? It's the system we have however you choose to justify its existence, there's a reason this "flaw" keeps being exploited and perpetuated all over the world.

And sure, I will blame the bank for "letting" me overdraft because it's not my choice to do so. It's taking advantage of a flaw in the system and leveraging it for the benefit of the bank. There's a reason you can't simply opt out of overdrafts and disable that "feature" in many bank accounts.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: krypto2000] * 2
    #25646209 -

There are many ways they can go broke, provided there are no bailouts. We all know it will happen again. Socialism for the wealthy, cut throat capitalism for the rest. Most accept this as a necessary evil.


--------------------
“I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear. I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing. Only I will remain.”

Edited by SirTripAlot (11/29/18 08:31 AM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: SirTripAlot]
    #25646214 -

And yet there are bail outs though so the statements remains true. Some banks fall, sure, but what does that do other than further concentrate wealth into the larger banks?

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Brian Jones]
    #25646578 -

Brian Jones said:
shivas.wisdom said:
So without continual credit growth, decline in money supply will eventually result in economic system collapse?


So (and I'm not disagreeing), it's a ponzi scheme.


No.  We don't need continual credit growth.  We see that happening because people and Governments like to borrow, but it's not necessary or required.

And it's not a Ponzi scheme by definition of Ponzi scheme, where first/early investors profit off of second/later investors.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: SirTripAlot]
    #25646588 -

SirTripAlot said:
There are many ways they can go broke, provided there are no bailouts. We all know it will happen again. Socialism for the wealthy, cut throat capitalism for the rest. Most accept this as a necessary evil.


This basically sums it all up, but almost everyone including liberals all supported the bailouts by the government and central banks. For the record, I didn't.

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