Where the banks got the money...

[youngdan]

Youngdan,

No, sorry, i think that Lincoln's greenbacks and the Colonial scrips were, and still are, the best form of money that has ever been developed. The Nomisma of ancient Rome done more than anything to turn the city into an Empire.

I think hat you may be on to something there. The money supply needs to be taken out of private hands. A return to the Gold Standard would, if any thing, increase the power of the bankers over the economy. It would also lead to horrible economic contraction.

Government issued money has also worked very well in the Channel Islands, particularly Guernsey.

Debt Virus: A Compelling Solution to ... - Google Books

While being a Paulite for literly decades I think it could be a mistake to go with a gold backed currency. I question whether it would cause deflation though. That aside the problem with gold now imo is that the banking families have bought a great(unknown percentage) out of public ownership and into their private hands at rock bottom prices.

It is likely that those people who are presently antigold will propose a global gold backed currency. They will set the price extremely high.

Silver may be a better option from the sense that it's ownership is not so concentrated. This was the old argument of the "cross of gold" debate in the 1890s. Mexico has being considering this. For them it would be a brilliant idea but their leaders have not the Mexican citizens best interests at heart, no surprise there


Are you a Socialist yourself. It amazes me to see other socialists talking shythe about peanuts and seemingly unaware that the central banks, which they like robots are taught as good, steal trillions right before their eyes.


A Socialist should be urging the state to be in control of the money but they are easily fooled.

[nuj]

.

The best way to go is privately produced money.

Company scrip? Genius.

"Some people say a man is made outta mud
A poor man's made outta muscle and blood
Muscle and blood and skin and bones
A mind that's a-weak and a back that's strong

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store"

From "16 Tons", written by Merle Travis, 1955.

[atlantic]

Yd, you could always go on a bill of exchange principle.

While being a Paulite for literly decades I think it could be a mistake to go with a gold backed currency. I question whether it would cause deflation though. That aside the problem with gold now imo is that the banking families have bought a great(unknown percentage) out of public ownership and into their private hands at rock bottom prices.

It is likely that those people who are presently antigold will propose a global gold backed currency. They will set the price extremely high.

Silver may be a better option from the sense that it's ownership is not so concentrated. This was the old argument of the "cross of gold" debate in the 1890s. Mexico has being considering this. For them it would be a brilliant idea but their leaders have not the Mexican citizens best interests at heart, no surprise there


Are you a Socialist yourself. It amazes me to see other socialists talking shythe about peanuts and seemingly unaware that the central banks, which they like robots are taught as good, steal trillions right before their eyes.


A Socialist should be urging the state to be in control of the money but they are easily fooled.

[youngdan]

Indeed, hostages could be exchanged. I wouldn't like anyone to be proven untrustworthy

[20000miles]

[Kensington]

Youngdan,

A serious contraction in the money supply will lead to serious economic problemsm so the gold-standard would have serious negative effects. We saw it in the Great Depression and we saw it in this recession too. Fortunately, Obama took Paul Krugman's (and Conrad Black's) advice and instituted a New Deal mark 2. It is not very pleasant, but Obama, stuck in this monetary system, had no other choice.

It always puzzles me when Conservatives argue that the New Deal had nothing to do with ending the depression; they put it down to WW2. So, the huge Government deficit spending during the New Deal, creating bridges and dams, had no positive effect on the economy, but the huge deficit spending during the war, making bombs and bullets, had a fantastically positive effect!

I am not particularly interested in our micro-socialist parties. I am yet to meet a member who strikes me as having a clue about very much at all. Socialists do not support the Central banking system, they just do not have a clue what it is or how it works.

I think that the best form of Government, empirically, is the Social democracy practiced by most small European countries. I will go with what we know works; not what a book or ideology says, with supreme confidence, definitely will work.

I would consider myself an environmentalist and a localist. The ecological problems that are coming, whether we like it or not, necessitate that we change our economic system entirely.

i do respect Ron Paul. If he seriously examined Government-issued money (and read some science books), he would offer a serious, considered alternative. If my memory serves, some of the early Austrian economists supported public money, such as Irving Fisher. Maybe a new breed of Libertarians will rediscover it.

[youngdan]

Well Paul first. He is viewed as being a libertarian, this is not exactly correct. The party he should belong to is The Constitution Party. He ran as a libertarian in 88 because the Constitution Party did not exist at that time. So his positions never change. The Constitution calls for gold and silver so that is his position. The parties are very similiar. The big difference is with immigration where a true libertarian would want liberal immigration and the CP would not. Then you have abortion. Paul cleverly gets round this tar-baby by saying that abortion falls under the governance of the states and they would decide on an individual basis. Needless to say abortion is not mentioned in the Constitution so the 14th Amendment kicks in which it says that anything not mentioned in the US Constitution is a state matter. He himself is of course against abortion and each and every year introduces The Sanctity of Life bill into Congress to no avail. This Bill would outlaw abortion regardless of what the Supreme Court did.

Sanctity of Life Act - Wikipedia, the free encyclopedia

Now you seem to accept on face value that a deflation would occur should a gold backing be introduced.

I would put it to you for consideration that there is a great deflation occuring right now without a gold backing. Were it not for the fed buying rubbish it would be much worse. This deflation will pick up steam as well untill the currency just collapses into a hyperinflation.

The gold standard worked very well up until 1913.

The problem, aside from the Fed, is the fractional reserve banking carried out by regular banks. they can in of themselves expand the money supply but when the defaults hit you have the inverse process like we have now.

Money expansion is theft, the advantages are easily seen but the disadvantages are hidden to the victim.


Paul was asked about the turmoil from going from A to B and said it would be difficult. He was also asked about the Treasury issueing the money directly, he said it would be far better than the Federal Reserve doing it.


The ordinary socialists are clueless but Marx understood well the importance of having a central bank. A miracle machine to enrich the extreme wealthy and destitute the workers and the beauty is they never figure it out

[cd27]

nice exposition youngdan, in short there are no shortcuts!

[Kensington]

Yes, i agree. This crisis was simply this: the banks stopped lending money and the money supply began to shrink. Deflation would have been a real problem if the Governments did not greatly increase their national debt.



The very important difference, however, is over our different understanding of inflation. The classical view is that inflation ensures when there is too much money chasing too few goods'. That does not mean that the money supply should never increase. As Keynes pointed out, increasing the money supply will only cause inflation if there is not a subsequent increase in supply.

Having the ability to increase the money supply is, therefore, very important. It needs to occur in order to facilitate economic growth and will not necessarily lead to inflation. China is a perfect example. For hundreds of years they have managed to keep prices relatively stable despite a huge influx of metal and currency. A stable currency is not a good idea.

Holland become a global power because of its banking system and increasing money supply. A growing money supply leads to economic growth, if regulated properly. A Gold-standard would lead to deflation in the short-term and stagnation in the long-term.

But, this idea that inflation is caused by 'too much money chasing too few goods' does not make much sense if you examine it. During the Celtic Tiger years, we did not see 'too few' goods. Marketing, advertising and choice increased dramatically. I do not think that it is fair to say that there was 'too much money'. Poverty rates increased during our glory years and if you ask anyone, even during the best of times, they will say that there never is enough money and that there are too many goods; not too little. When was the last time you heard a company say that they are selling too much and need to reduce there market? Inflation is not caused primarily (if at all) by too much money, it is caused by debt-based money.

The lack of purchasing power, the gap between wages and prices is caused by debt. The price of goods is unnaturally high due to a company's need to pay off crippling debt and interest. A consumer's purchasing power is unnaturally low due to his need to pay off his debt. Inflation, the difference between wages and prices, is a characteristic of a debt-based monetary system.

In a debt-free money system, there would not be that unnatural gap between prices and wages, therefore there may not be a serious risk of inflation.

So, expanding the money supply is sometimes necessary and the Government should have that option. It should also have the option to decrease the money supply. 'Printing money' does not always cause inflation and inflation itself is a characteristic of a debt-based monetary system.

Whereas Ron Paul may see merit in both systems: a Gold-standard and Government-issued money, i do not. A Gold-standard is not preferable to the present system; it would probably be much worse. Getting serious about monetary reform is a necessity, but if we are going to reform the system, it has to be for the better.

[youngdan]

Yes, i agree. This crisis was simply this: the banks stopped lending money and the money supply began to shrink. Deflation would have been a real problem if the Governments did not greatly increase their national debt.



.

I will dwell on this at the moment. The problem was not the banks stopping lending, the problem was the banks stopping getting paid back.


So the money supply started to shrink. Now with a system that depends on an ever expanding money supply that could well be described as a real problem. Especially for the owners of the securities which were about to become worthless.

But fear not the ceo of Goldman Sacks just happened to be the US Treasury Secretary. What a phucking stroke of luck, and here I was thinking that Larry Lucky Silverstein was the luckiest man alive, hohohohehehehahaha oink oink oink.

Let me see how they are doing during the crash,

Goldman Sachs to make record bonus payout | Business | The Observer

Well crikey let me stand on a sting-ray because they have had the best 6 months in 140 years.

This is almost as good as reading about the fools that think the North Koreans can fly a firecracker with a non-existant nuke on it and hit Honalulu, book im Danna. If I don't post tomorrow it will mean that I have died laughing.




Where was I, ok you know this but the casual reader should be aware of the difference in the Fed monetising and the government stimulating. The Fed printing does not raise the national debt. The government borrowing does as it can not print money.