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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 2
    #25647567 -

Not if the bankers give you some of their money back to purchase the goods or services that you just paid them to let you make for them.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25647582 -

Quote:
Once again, ANY money the banks create is money they must eventually destroy.


Yes.  They don't get to keep the money they create.  They get to keep the interest they charge on it.  How many %s of the total American or for that matter world's continuously issued money supply does it take until we are talking about some real money here?

It's gotta be in the trillions a year.


--------------------
 

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: krypto2000]
    #25647586 -

Quote:
Not if the bankers give you some of their money back to purchase the goods or services that you just paid them to let you make for them.


Yeah, not then, just when you make a debt payment.  It's only a matter of time. 

The only way to get more money into the system again is to take on more debt.


--------------------
 

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: Falcon91Wolvrn03]
    #25647587 -

Falcon91Wolvrn03 said:
shivas.wisdom said:
It seems that answer assumes that the spending of lenders will be at a comparable rate to the debt creation of borrowers, in order to prevent accumulation of wealth among lenders and accumulation of debt among borrowers. Correct?


No.  Once again, any debt that is created gets destroyed as the loan is paid off.  It assumes they'll spend some of the interest they collect.


But if the bank earns a profit on every loan due to interest, that profit will concentrate the money supply in the hands of the lenders.

Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans. What happens when mass defaults begin?


Looking at our present world, the "lenders" are spending some of the interest they collect, but not all of it. Wealth is becoming increasingly concentrated, and the banking system appears to be a significant factor in this. Why should we assume accumulation of wealth won't happen?


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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers] * 1
    #25647632 -

VroomerMcZoomers said:
And I don't think it's because the government runs deficits. 


Oh, it absolutely is, or at least, that's why the system exists in the first place.
Look back to the chartering of the Bank of England.

https://en.wikipedia.org/wiki/Bank_of_England#Founding
Quote:
England's crushing defeat by France, the dominant naval power, in naval engagements culminating in the 1690 Battle of Beachy Head, became the catalyst for England's rebuilding itself as a global power. England had no choice but to build a powerful navy. No public funds were available, and the credit of William III's government was so low in London that it was impossible for it to borrow the £1,200,000 (at 8% p.a.) that the government wanted.

To induce subscription to the loan, the subscribers were to be incorporated by the name of the Governor and Company of the Bank of England. The Bank was given exclusive possession of the government's balances, and was the only limited-liability corporation allowed to issue bank notes.[14] The lenders would give the government cash (bullion) and issue notes against the government bonds, which can be lent again. The £1.2m was raised in 12 days; half of this was used to rebuild the navy.


It was literally brought into existence in order to make a big loan to the Gov't that it didn't have credit for in order to finance a military expense that would otherwise have to be paid through taxation.  In return, the Bank was allowed exclusive rights to poof money into existence with which to lend with interest.  This is the model banking systems around the world follow and it is important to keep in mind that irresponsible deficit spending is a feature, the feature, not a bug. 

https://en.wikipedia.org/wiki/Bank_of_England
Quote:
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based.


Edited by ballsalsa (11/29/18 11:32 PM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: VroomerMcZoomers]
    #25647633 -

VroomerMcZoomers said:
Falcon91Wolvrn03 said:
Once again, any debt that is created gets destroyed as the loan is paid off.  It assumes they'll spend some of the interest they collect.


Without continuous new loans, the money supply would disappear.  Any debt payment destroys the money.


Not all money is created through debt.


--------------------
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] * 1
    #25647642 -

shivas.wisdom said:
Falcon91Wolvrn03 said:
It assumes they'll spend some of the interest they collect.


But if the bank earns a profit on every loan due to interest, that profit will concentrate the money supply in the hands of the lenders.


And if ANY coropration, such as Amazon, earns a profit on the goods it sells, that profit will concentrate the money supply in the hands of the owners.  :shrug:

shivas.wisdom said:
Wealth is becoming increasingly concentrated, and the banking system appears to be a significant factor in this. Why should we assume accumulation of wealth won't happen?


Wealth IS accumulating in the hands of the rich.  Not just bankers, but CEOs too.  That's why I'm against the Trump tax cuts for billionaires.


--------------------
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]
    #25647648 -

I agree. So why support a banking industry that is a significant factor in wealth accumulating in the hands of a few?

You also missed this paragraph: Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans. What happens when mass defaults begin? 


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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: shivas.wisdom]
    #25647663 -

shivas.wisdom said:
I agree. So why support a banking industry that is a significant factor in wealth accumulating in the hands of a few?


I said many times I'm not opposed to a Government owned bank.

shivas.wisdom said:
You also missed this paragraph: Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans.

Looking at our present world, the "lenders" are spending some of the interest they collect, but not all of it.


I didn't miss your paragraph.  I missed your evidence supporting how big of a problem that is.


--------------------
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]
    #25647681 -

Quote:
Quote:

VroomerMcZoomers said:
Quote:

Falcon91Wolvrn03 said:
Once again, any debt that is created gets destroyed as the loan is paid off.  It assumes they'll spend some of the interest they collect.


Without continuous new loans, the money supply would disappear.  Any debt payment destroys the money.


Not all money is created through debt.



Right.  Everything but the debt-free money would disappear, which would be like 90% of it disappeared


--------------------
 

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 (11/30/18 12:04 AM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25647685 -

Quote:
Quote:

shivas.wisdom said:
You also missed this paragraph: Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans.

Looking at our present world, the "lenders" are spending some of the interest they collect, but not all of it.


I didn't miss your paragraph.  I missed your evidence supporting how big of a problem that is.




It seems nearly self evident that there is no social positive from having privileged class of this sort, but lots of negatives.


--------------------
 

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
    #25647699 -

VroomerMcZoomers said:
Everything but the debt-free money would disappear, which would be like 90% of it disappeared


Correct.

VroomerMcZoomers said:
It seems nearly self evident that there is no social positive from having privileged class of this sort, but lots of negatives.


Agreed.


--------------------
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]
    #25647744 -

If you agree that it is nearly self evident, why are you asking me to provide evidence before responding? Are you really asking for proof that wealth inequality is increasing?

Here:
Share of wealth globally by year, as seen by Oxfam, based on the net worth



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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: shivas.wisdom]
    #25647815 -

shivas.wisdom said:
Falcon91Wolvrn03 said:
shivas.wisdom said:
You also missed this paragraph: Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans.

Looking at our present world, the "lenders" are spending some of the interest they collect, but not all of it.


I didn't miss your paragraph.  I missed your evidence supporting how big of a problem that is.


If you agree that it is nearly self evident, why are you asking me to provide evidence before responding? Are you really asking for proof that wealth inequality is increasing?


No, I know wealth inequality is increasing.  I was asking for evidence that lenders aren't spending enough of their profits.

Don't forget the Fed also injects new money into the money supply that provides enough to cover interest payments.


--------------------
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
    #25647917 -

It doesn't matter if they are or are not spending enough of their profits though does it? The problem is that we need to ponder this question at all. The fact that we need them to spend their profits at an equal to or greater rate than the general publics illustrates an unequal relstionship and a concentration of power.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Falcon91Wolvrn03]
    #25648301 -

Falcon91Wolvrn03 said:
shivas.wisdom said:
Falcon91Wolvrn03 said:
shivas.wisdom said:
You also missed this paragraph: Unless the lenders spend money at an equal or greater rate than their profit, eventually the only money borrowers will have access to for paying off debt is through more loans.

Looking at our present world, the "lenders" are spending some of the interest they collect, but not all of it.


I didn't miss your paragraph.  I missed your evidence supporting how big of a problem that is.


If you agree that it is nearly self evident, why are you asking me to provide evidence before responding? Are you really asking for proof that wealth inequality is increasing?


No, I know wealth inequality is increasing.  I was asking for evidence that lenders aren't spending enough of their profits.

Don't forget the Fed also injects new money into the money supply that provides enough to cover interest payments.


The Fed creates new money by purchasing gov't debt though.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: qman] * 2
    #25648319 -

qman said:
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.


I think the bailouts were necessary, but I think that the government should have taken control of those companies, and the board of directors should have all been fired, and they should not have received exorbitant bonuses, etc. The government should have broken up the banks.

The problem is, they were too big to fail. So, we should have split them up. Now GM is going to be cutting thousands of jobs, and closing down factories, as a thankyou for us saving their ass 10 years ago.


--------------------
"It is no measure of good health to be well adjusted to a profoundly sick society," - Jiddu Krishnamurti
FARTS
"No my dog won't bite you, tho it had the right to. You ought to give him credit, cuz he knows I woulda let him" - Modest Mouse (And Wooof!)
Every one of you should see this video.
"Facts are chiels that winna ding, and downa be disputed" - Robert Burns


Edited by Bigbadwooof (11/30/18 11:13 AM)

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Bigbadwooof]
    #25648420 -

Bigbadwooof said:
qman said:
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.


I think the bailouts were necessary, but I think that the government should have taken control of those companies, and the board of directors should have all been fired, and they should not have received exorbitant bonuses, etc. The government should have broken up the banks.

The problem is, they were too big to fail. So, we should have split them up. Now GM is going to be cutting thousands of jobs, and closing down factories, as a thankyou for us saving their ass 10 years ago.


Nothing is too big to fail, insolvency, bond defaults, bankruptcy and buying distressed assets for pennies on the dollar are all healthy parts of free market capitalism.

It works itself out in the end as it punishes the bad behavior and rewards the responsible people.

If they were allowed to fail we wouldn't have to split them up, nature would have done it.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: Bigbadwooof] * 3
    #25648424 -

Exactly. I could buy that the companies were too big to fail but I have trouble when we extend that to the board of directors behind the company. They did fail so why are we giving them bonuses and control of the ship? If someone steers you into an iceberg you don't then ask them for directions.

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Re: Neither debt nor the money supply need to grow under fractional reserve banking [Re: krypto2000] * 1
    #25648470 -

krypto2000 said:
Exactly. I could buy that the companies were too big to fail but I have trouble when we extend that to the board of directors behind the company. They did fail so why are we giving them bonuses and control of the ship? If someone steers you into an iceberg you don't then ask them for directions.


Yeah, but it's really not a problem anymore. I don't know if you recall, but Hillary Clinton went to Wall Street, and she told them to 'cut it out'.


--------------------
"It is no measure of good health to be well adjusted to a profoundly sick society," - Jiddu Krishnamurti
FARTS
"No my dog won't bite you, tho it had the right to. You ought to give him credit, cuz he knows I woulda let him" - Modest Mouse (And Wooof!)
Every one of you should see this video.
"Facts are chiels that winna ding, and downa be disputed" - Robert Burns


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